Fundamentals 10/19: Consumer Inflation, Housing Starts, Mortgage Apps

Inflation (September 2011)
– CPI – Month/Month (overall) +0.3%
– CPI – Year/Year (overall) +3.9%
– CPI – Month/Month (core) +0.1%
– CPI – Year/Year (core) +2.0%.
-There are several stories behind this data. The first is that the only lasting effect of QE II was inflation of commodity prices. The second may be that core inflation has subsided. The good news for seniors is that, as a consequence of this high inflation we had, Social Security benefits will increase 3.6% starting in January 2012.

Housing
– Housing Starts (September 2011) 658,000. Previous was 571,000, consensus was 590,000
– Permits 594,000. Previous was 620,000. Consensus was 620,000.
– We need 1,500,000 annual Housing Starts to keep pace with population growth. We are still seeing the effects of working on the inventory of existing homes consequent to the collapse of the housing bubble.

Mortgage Applications (week ending 10/14)
-Last week had a holiday so this data may be less than compelling:
-Composite Index – Week/Week -14.9 %
-Purchase Index – Week/Week -8.8 %
-Refinance Index – Week/Week -16.6 %.