MBA Purchase Applications Index 422.5
(Econoday.com) - The Mortgage Bankers purchase index held steady in the latest week, overshadowed by another sharp rise in the refinancing index which may be indicating that a new round of home refinancing, and along with it prepayments in the mortgage-backed securities market, is in full swing. The purchase index for the week ended Feb. 27 slipped to 422.6 from 423.5 in the prior week, indicating sluggish conditions in the housing market consistent with other economic data including Monday's construction spending report. The refinancing index rose 5 percent to 3532.2, the best reading since the refinancing surge of the summer.
Business Activity Index 60.3%
The business activity index, from the ISM non-manufacturing survey, fell back to 60.8 in February from a level of 65.7 in January. The drop was significantly larger than expected and could be viewed in a negative light by equity investors, although bond investors may be pleased to see the weaker reading. Actually, any level above 50 percent reflects expanding business activity, and a level of above 60 percent still reflects healthy activity.
Most of the components of the ISM non-manufacturing survey posted declines in February from high January levels including new orders, employment, supplier deliveries, order backlogs and even prices. The price index decreased to 57.3 in February from 59.7 in January. This is a far cry from the February ISM manufacturing survey where the index had jumped to 81.5.
All in all, the report shows healthy activity for the month, but the decline from January was larger than expected.
The Beige Book
(Econoday.com) - The Beige Book was prepared at the Federal Reserve Bank of Philadelphia based on information collected before February 23, 2004.
"Economic activity continued to expand in January and February, according to information received by Federal Reserve District Banks. Growth was variously described as moderate in Boston, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, and Kansas City, firm in Minneapolis, sound in San Francisco, and showing signs of accelerating in New York, Richmond, and Dallas.
Consumer spending rose in most Districts. There were gains in sales of general merchandise in January and February in all Districts except St. Louis, which reported a slight decline. In contrast to the general improvement in merchandise sales, motor vehicle sales slowed in most Districts. Tourism activity increased compared to last winter. Service sector activity has been expanding. Manufacturing output continued to rise in all Districts except Cleveland, where it has been steady. Real estate market conditions showed little change: commercial markets generally remain soft and demand for housing continues to be strong. Agricultural conditions were mixed: demand for beef appears to be recovering from the effects of mad cow disease but exports of poultry products have been curtailed by the outbreak of avian influenza. Oil and gas production remain at high levels and iron ore processing has increased. Bank lending has been growing moderately.
Employment has been growing slowly in most Federal Reserve Districts. Wages and salaries have increased slightly, but employers report substantial increases for employee health-care costs. Most Reserve Banks reported level or modestly increasing retail prices, but information received from manufacturers and other businesses indicates that commodity prices have moved up more noticeably. The largest increases have been for steel and for lumber and other building materials. Shipping charges have also risen recently."
04.03.03 10:13 #