Wednesday Economic Roundtable

First on the docket is the MBA Mortgage Index, from Marketwatch:

Mortgage applications fall 4.6%

Applications for mortgage loans at major U.S. banks fell by a seasonally adjusted 4.6% last week, the Mortgage Bankers Association reported Wednesday.

Applications were down 31.3% from a year ago.

The purchase index sank by 6.2% to a level 19% lower than a year ago. The refinance index fell 1.6% to a level 46% lower than a year ago.

From Bloomberg:

U.S. June Consumer Prices Rise 0.2%; Core Rises 0.3%

Consumer prices in the U.S. increased for a sixth straight month in June and costs excluding fuel and food rose more than forecast, suggesting Federal Reserve policy makers will keep raising interest rates.

Prices paid by Americans rose 0.2 percent after May's 0.4 percent increase, the Labor Department said in Washington. Excluding food and energy, so-called core prices rose 0.3 percent for a fourth straight month and exceeded the 0.2 percent median estimate in a Bloomberg News survey of economists.

Core prices increased 2.6 percent from June 2005, the biggest year-over-year rise since 2002, leaving inflation farther above the Fed's comfort zone. The report comes less than two hours before Fed Chairman Ben S. Bernanke presents his semi-annual economic report to Congress.

``Inflation pressures are picking up,'' Mike Moran, chief economist at Daiwa Securities America Inc. in New York, said before the report. ``Underlying conditions still carry inflation risk, with energy prices staying high and not much slack left in the economy.''

Core inflation has increased 0.3 percent for four straight months, the longest such stretch since January to April 1995. Medical care, rents and airfares all rose last month.

From the Associated Press:

Housing construction drops 5.3 percent

Construction of new homes fell by 5.3 percent in June, the Commerce Department reported Wednesday in another signal that the once-booming housing market is beginning to slow.

Builders started construction on new homes at a seasonally adjusted annual rate of 1.85 million units last month.

Applications for building permits, considered a good sign for future activity, fell for a fifth straight month, dropping by 4.3 percent in June to a seasonally adjusted annual rae of 1.862 million units.

Other topics for discussion today:

Bernanke's testimony to Congress, which is set to begin at 10 this morning. The topic will be updated as information becomes available.

Caveat Emptor!
Grim