Orange County- Economic News

Last Week in the News
Fueled by a surge in gasoline prices,May's Consumer Price Index increased by 0.7%, its fastest pace in 20 months, the Labor Dept reported June 15. However, core consumer prices, which exclude volaitle food and energy costs, rose only 0.1%, slightly lower thatn the 0.2% analysts had predicted.

The Producer Price INdex, which measures inflation at the wholesale level, rose 0.9%, worse than the 0.6% increase econmists had expected. Yet, wholesale core inflation increase a moderate 0.2%, slightly better than the 0.3% hike analysts had anitcipated.

Meanwhile, compared to April, retail sales in May surged 1.4%, the sharpest rise in 16 months and double the increase analysts had expected, the Commerce Dept said June 13. The increase should ease fears that consumer spending, which accounts for 2/3 of the economy, could falter in coming months under the impact of rising gasloine prices, a challenging housing market and recent increases in interest rates.

Rates on 30yr mortgages rose for a fifth straight week, hitting the highest level in 11 months, Freddie MAc said June 14. The rise parallels rising yields on Treasury securities.

Foreclosures for May were up 19% from April and up nearly 90% from May 2006, Realty Tac reported June 14.