6/11: MetroIntelligence Economic Update by P. DUFFY

Purchase loan applications rise another 5 percent, rates unchanged

The Market Composite Index increased 9.3 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 5 percent (up 13 percent year-on-year) and refinance activity rising 11 percent (up 80 percent year-on-year. The average contract interest rate for 30-year fixed-rate mortgages increased to 3.38 percent from 3.37 percent, while the effective rate remained unchanged from last week.



April layoffs reveal gap of 17.1 million unemployed persons versus job openings

April job openings decreased 16.1 percent to 5.0 million, with hires falling 31.1 percent to 3.5 million (a series low) and separations falling 32.5 percent to 9.9 million, which was still the second-highest in series history.  Given the rise in the number of officially unemployed persons to 23.1 million in April, that leaves a gap of 17.1 million between job openings and persons available for work.



May CPI slips another 0.1 percent, now nearly flat year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in May after falling 0.8 percent in April, and rose by just 0.1 percent over the last 12 months.  The index for all items less food and energy fell 0.1 percent in May, its third consecutive monthly decline, and marking the first time this index has ever declined in three consecutive months.  Over the last 12 months, this ‘core index’ has risen 1.2 percent versus an increase of 2.4 percent year-on-year in February.



May Small Business Optimism Index rebounds 3.5 points to 94.4

The Small Business Optimism Index increased 3.5 points in May to 94.4, a strong improvement from April’s 90.9 reading. Eight of the 10 Index components improved in May and two declined. The NFIB Uncertainty Index increased seven points to 82. Reports of expected business conditions in the next six months increased 5 points to a net 34%, following a 24-point increase in April. Owners are optimistic about future business conditions and expect the recession to be short-lived.