Christmas Eve Business News

Here are a few business news items for your review and immediate discard from your mind as you move onto much more joyous thoughts over the next few days.

  • Core inflation slowed to 1.9% in November. The recent peak was 2.4% in July. Actually, this drop was somewhat on the positive side as the components didn’t show any dramatic deflationary activity. Link here to full report.
  • Jobless claims for the week ending December 20th were up to 586,000 from 556,000 the prior week. The four week average, a much more reliable number, was 558,000 up from 544,250. Once again the press tag line on this is “the worst number since December 1982.” As I discussed last night with regard to home sales, this is misleading. The labor force was much smaller in 1982 so this number in no way represents the same amount of pain as was felt at that time. Link here for the full report.
  • There are two reports on home prices that I picked up today. One makes no sense at all and the other offers some sunshine. First, Reutersis quoting Richard Bove, a good banking analyst, as saying that the recent boom in refinances portends higher home prices. Huh? No explanation for that statement is offered. I have to think they missed something in the translation. Second, Housing Wire on the other hand presents some evidence that the pace of decline in home prices is at least not accelerating. Some see this as a sign that housing prices may be forming some sort of floor. Grasping at straws perhaps but any port in a storm.
  • Finally, as you probably know, refi applications are soaring. Applications were up 48% last week and up 126% from this time last year. There are some indications that the numbers are over stated as there appears to be a lot of duplicate applications in the pipeline. Moreover, Housing Wire has documented that this may be one of those situations where you need to be careful what you wish for. The mortgage industry is painfully short of people to handle the surge and the lack of warehouse credit facilities might make funding the loans very difficult.

That covers it. Actually, it wasn’t all bad. Let’s hope and pray that represents a trend.

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