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Consumer Credit Jumps

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The major averages enter the final hour mixed on little real news, though the yield curve continues to flatten.

Consumer Credit nearly doubled expectations in May hitting 24.6 billion on a huge jump in Credit Card use after it reached a 6-month high of 9.8 billion. Non-revolving debt essentially student and auto loans also surged hitting a 6-month high of 14.8 billion. The 7.6% advance was the largest in 6-months for the series, despite sharply higher interest rates.

The May Producer Price Index or PPI, which measures wholesale price changes, advanced .5% on large gains in gasoline and energy prices, and to a lesser extent services. On a year ago basis the PPI is up 3.1%.

Wholesale inventories advanced .1% in April on increased durable goods orders. Sales gained a respectable .8% during the same period on broad based gains as the inventory to sales ratio slipped to 1.28 months.

The Mortgage Bankers Association or MBA reports that its Mortgage Activity Index slipped .5% last week as refi’s fell 2% and purchase apps gained .5%. The 30-year contract rate for a Jumbo Loan increased fractionally to 4.71%. This series continues its downward trend began late last year as interest rates started creeping up in earnest.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

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