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Weekly Economic Update|Week of May 19, 2008 Episode
Reports last week were mixed. On the positive side, the housing market improved (starts and building permits rose) and the consumer price index (CPI) and core CPI moderated. On the negative side, consumers continued to cut back on spending causing retail sales to edge down 0.2%. The industrial sector suffered with production slowing to its lowest year-over-year pace in more than four years and capacity utilization fell to the lowest level in over two years. While economic reports were mixed, the stock markets gained on the backs of the technology and energy sectors. Oil companies benefited from an agreement to suspend buying oil from the Strategic Petroleum Reserve for six months but the disappointment that Saudi Arabia will raise output by only 300,000 barrels a day led to oil prices closing at another all-time high of $126.68 a barrel. Based on federal funds futures contracts, investors believe with a 92% probability that the Federal Open Market Committee will hold the federal funds rate target at 2.00% at the June 24/25 meeting.
[ Mon, 19 May 2008 00:00:00 GMT ]
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