Mortgage application volume falls 14.2 percent as rates rise

Mortgage application volume fell 14.2 percent during the week ending April 18, according to the Mortgage Bankers Association's weekly application survey.

The MBA's application index fell to 637.6 from 743.4 the previous week.

Refinance volume fell 20.2 percent, while purchase volume declined 6.4 percent. Refinance applications accounted for 49.2 percent of total applications compared with 53.5 percent a week earlier.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

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This article addresses the declining amount of mortgage applications being completed which shows the declining housing market. This article also addresses the rising interest rates of items which prevent some from purchasing or investing. Both of these factors show the declining United States's economy which many hope will not last much longer.

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US stocks head for moderately lower open

Stocks appeared headed for a moderate decline Wednesday as investors awaited another round of first-quarter earnings reports and hoped the numbers would help determine where the economy is headed.

Boeing Co. said its first-quarter earnings rose 38 percent and that its revenue advanced 4.1 percent. The company affirmed its 2008 profit forecast.

Some results arriving Wednesday painted a lackluster picture of certain sectors. Bond insurer Ambac Financial Group reported it swung to a loss of $1.66 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages. The stock is down about 9 percent in premarket, electronic trading.

Health insurer WellPoint Inc. posted a 25 percent decline in its first-quarter profit and lowered its full-year forecast because of higher medical costs.

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This article addresses the continued decline in the stock market which can be attributed and can contribute to the declines in the United States's economy. This article also addresses Wall Street's concern with how long this recession will last. This article simply delineates numerous stocks that declined which are an example of the declining US economy.

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Student Loan Turmoil Stresses Families

Paying for college is rarely easy, but this year parents and students could have a tougher time securing the necessary financing.

More than 55 lenders who originate 13% of college loans have dropped out of the federal student loan program in recent months, prompting concern that some students may not be able to finance their education. Financial firms say they are leaving because subsidy cuts enacted by Congress last year, combined with the Wall Street credit crunch that has made it costlier for them to sell the loans to investors, have slashed the market's profitability.

The departures come at a time when lenders are also tightening their standards for private student loans, a smaller but growing segment of the industry.

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This article addresses the continued decrease in availability of student loans for those students entering college. Many lenders have left the federal student loan program because of the "continuing credit crunch on Wall Street." Because of the concern and the continued worry that more lenders will drop out of the program, the federal government is willing and prepared to step in and provide assistance where and when it is necessary. This shows that the decline in the United States's economy has not only affected the housing market and other prices, but it has also affected the ability for students to further their education because the finances are not available.

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Fears of Long Recession Rising

There is little debate about whether the U.S. economy is in a recession. The question is how painful and long the downturn will be.

There is a growing fear among some economists that the recession will be particularly bad.

"We just can't believe it's going to be short. The question is how bad can it get? The situation is moving more towards severe than towards mild," said Allen Sinai, chief global economist for Decision Economics.

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This article addresses the concern of the United States's economy and being in a recession. The article states that there is little argument that the US is actually in a recession, but the concern arises when the thought of how long we will be in this recession is mentioned. The article delineates all of the various influences of the recession and the things that have contributed to the downward spiral of the United States's economy.

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Former Fed Chief: Inflation Isn't Dead

Former Federal Reserve Chairman Paul Volcker, famous for helping whip sky-high inflation in the early 1980s, said Tuesday that rising prices should again be a subject of concern for the U.S. economy.

Speaking before the Economic Club of New York, Volcker said today's economic conditions are not as severe as they were during his tenure, but still suggested caution about the threat of inflation. He also warned that the weak dollar is a major problem.

"We are at a point where we have to worry about [inflation]," said Volcker, who was appointed Fed head in 1979 by President Jimmy Carter before stepping down in 1987.

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This article addresses the former Federal Reserve Chief, Paul Volcker's statement that the United States should be aware and mindful of the continued rise in prices, and steps should be taken to combat this problem. His concerns included the threat of inflation and the weakness of the dollar. Volcker's statements simply reaffirm what many have begun to believe: the United States is facing an economic crisis, and something must be done to reverse or at least begin to change this. The leaders must lay aside any criticism they have received, and must focus on bettering the economy to get the United States back on its feet.

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As Income Gap Widens, Recession Fears Grow

Poor and middle-class families are entering the recession in a precarious situation due in part to declining or stagnant income growth, a study released Wednesday has found.

Incomes, on average, have declined by 2.5% among the bottom fifth of families since the late 1990s, while inching up by just 1.3% for those in the middle fifth of households, according to an analysis by the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal think tanks.

The wealthiest slice of Americans, however, saw their incomes rise by 9%.

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This article addresses the continued growth in the gap of incomes. This article also addresses the continued rise in prices and inflation and the continued debt of families and the depreciation of the value of homes. This shows the continued struggle of the United States's economy which is evident in more than one area of the economy.

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New Home Sales Hit 13-year Low

New home sales fell to their lowest level in 13 years in February, according to a key government report on the battered housing market released Wednesday.

February sales came in at a seasonally-adjusted annual rate of 590,000, the Census Bureau report showed, down 1.8% from a revised 601,000 in January and down 29.8% from a year earlier.

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This article addresses the continued decline of housing prices and the housing market as a whole in the United States. This article also asserts that despite continued price declines, the number of homes sold continues to decrease. This shows the struggle of the United States's economy in multiple facets, including the housing market. According to the article, in order to stabilize the market, prices must continue to decline into 2009. These struggles show the decline of the US economy as a whole, and it is the government's duty to do whatever it takes to stabilize the economy.

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Diesel: The Truck Stops Here

The kid who delivers your pizza may be charging you an extra buck for gas, but for the guy that trucked the tomatoes, hauled the dough or milked the cows, passing along the fuel increase isn't as easy as pie.

From truckers and farmers to loggers, construction workers and fishermen, skyrocketing diesel prices are pushing what many consider the backbone of the American economy right up to the breaking point.

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This article addresses the effects of rising diesel prices on many businesses. Many businesses are forced to pay the high prices unless they want to complete shut down because they must use the gas to do what they are supposed to. However, because of serious competition, business owners are not able to raise their prices to consumers because they would lose business if they did so. The rise in diesel prices is attributed to the rising demand for diesel. Many business owners have done all that they can to cut back on prices, and for many of them there is no plan b or anything to fall back on. So what will they decide to do?

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Fed Loans Not Easing Credit Crunch

Banks could very well trip over themselves Monday as they bid on $50 billion in loans in the latest Federal Reserve auction.

But despite this eagerness to accept the government's "liquidity" injections, banks aren't significantly increasing their lending, experts said. In fact, some banks seem to be pulling back even further - for example, Citigroup Inc.'s (C, Fortune 500) last week said that it will scale back its mortgage business.

"It's still not enough to get the banks to loosen their lending terms," said Walker Todd, a research fellow at the American Institute for Economic Research and former attorney and economist at the New York Fed.

Banks have already borrowed a total of $160 billion since the Fed started holding these auctions in December as a way to ease the credit crunch, which began last year when mortgage defaults and foreclosures began to skyrocket. Since then, the crisis has extended far beyond the residential home loans, roiling the markets for everything from municipal bonds to student loans to auto financing.

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This article addresses the "liquidity" that the government says it has and the lack of increase in the bank's lending. Many banks even seem to be decreasing their lending. The Federal Reserve has been holding auctions since December in an attempt to ease the "credit crunch" that began as a result of mortgage defaults and foreclosures increasing dramatically. This "crunch" has grown to include municipal bonds, students loans, and auto financing. This "credit crunch" has even called to securities backed by Fannie Mae and Freddie Mac have been called into question. Because of this, the auctions are anticipated to continue for at least six more months. According to Tom Schlesinger, the Fed's actions are showing a "deepening sense of anxiety." The Fed has taken many steps to ease this credit crunch that the United States's economy is experiencing. Some believe that the problem is not with the liquidity; however, it is with the fear of rising defaults which causes them to "shy away" from offering credit. Another issue facing banks is the low capital standing that they have. Banks and the Federal Reserve have partnered and are making attempts to increase bank's capital standing. If the capital standing is raised, then banks may be more likely to lend money which can begin to reverse the credit crunch.

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Gasoline's Price Spike Has Only Just Begun

Gasoline hit record levels Tuesday - and experts say it will likely continue to soar in tandem with the skyrocketing price of crude.

The national average retail price for gas has risen 27 cents in the last month to $3.227 a gallon, matching the all-time high set on May 24, 2007, according to the motorist organization AAA.

And experts say motorists should prepare to pay nearly $4 a gallon - and in some places even more than that - before the price of gas finally comes down in the late spring as high prices crimp demand.

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This article addresses the continued rise in gas prices, and this rise is expected to continue as the price of crude oil continues to rise. According to the article, gas buyers should expect to pay almost four dollars a gallon before they can see any decline in prices. The price of oil increased dramatically when the economy worsened and the Federal Reserve cut interest rates in an attempt to reverse the worsening state of the economy. This shows that many times we must pick our battles, and because the federal reserve took these steps to reverse the state of the economy to some degree, an aspect of our economy (the price we pay for oil) was raised. According to the article, gas prices must rise so that the producers will make a profit and continue to produce the oil. These prices show the true value of a dollar and the possibility of the severity of inflation.

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New Recession Worry: Bank Failures

As if the economy wasn't already fighting enough strong headwinds, the risk of capital shortfalls and outright failure of the nation's banks is rising.

The Federal Deposit Insurance Corp., the federal agency that backs bank deposits, last week reported the biggest jump in "problem institutions" it has seen since the savings and loan crisis of the late 1980s. While the extent of the problem is still low by historic standards, it identified 76 banks as in trouble - a 52% increase from a year ago.

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According to the article, there is an increased risk for bank failures in the United States due to the current state of the economy. The Federal Deposit Insurance Corporation (FDIC) cited that largest increase in "problem institutions" since the crisis of the 1980s; there has been a 52% increase in "problem institutions" from last year. Many people believe that these seventy-six are just a slight representation of the large number of bank that are on the verge of failing. Many regulators are expecting around two hundred banks to fail within the next few years. The FDIC reassured people that despite the large number of "problem institutions," not that many banks will actually fail if the same thing happens that did last year (fifty "problem institutions," only three failed). Despite this hope that not many banks will fail, the FDIC plans to hire twenty-five staffers so that they will be prepared if and when the bank failures occur. This article shows the current state of the economy in that many banks are on the verge of failure because they do not have adequate resources in order to survive; however, the leaders of organizations that influence the banks are remaining optimistic while still preparing for the worst.

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Productivity Slows, Labor Costs Rise

Readings on worker productivity and labor costs in the final three months of 2007 were both revised higher, according to a government report Wednesday.

The Labor Department said productivity rose at a rate of 1.9% in the fourth quarter, up from an initial reading of 1.8%

Economists surveyed by Briefing.com had expected the reading to remain unchanged.

The revised growth rate is still sharply lower than the 6.3% productivity growth rate posted in the third quarter of last year.

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This article addresses the recent observations of the rising productivity and labor cost rates; these numbers were increased from the initial projection. Despite the rise of the observation for the fourth quarter, the productivity rate remains much lower than that of the third quarter. According to Sam Bullard, an economist with Wachovia, believes that this decrease in productivity is representative of the current state of the United States's economy. The Labor Department believes that the great increase in labor costs (2.1% to 2.6%) counteracts the slight rise in productivity rates (1.8% to 1.9%). According to the article, inflation will not rise to an outrageous amount if the labor costs remain steady. These percentages show the current state of the US economy, and it is now the government's job to be sure that these rates remain steady.

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Wholesale Prices Surge in January

Inflation at the wholesale level soared in January by the fastest pace in 16 years, pushed higher by costs for food, energy and medicine.

The Labor Department said Tuesday that wholesale prices rose 1% last month, more than double the 0.4% increase that economists had been expecting.

The worse-than-expected performance was certain to capture attention at the Federal Reserve, which has chosen to combat a threatened recession by aggressively
cutting interest rates in the belief that weaker economic growth will keep a lid on prices.

But the combination of rising inflation and weaker growth raises the threat of "stagflation," the economic malady that plagued the country through the 1970s, when a series of oil shocks left households battered by the twin problems of stagnant growth and rising prices.

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This article concerns the rising inflation rates that the United States's economy has been experiencing. This increase is attributed to rising costs for food, energy, and medicine. This article also addresses the Federal Reserve's attempt to avoid a recession by drastically cutting interest rates hoping that the "weaker economic growth will keep a lid on prices." Because of these two decisions, there are concerns that the United States's economy will become stagnant, a fear they called "stagflation." There has also been an increase in wholesale prices which the government is going to attempt to fight with one of the previous mentioned methods. The Federal Reserve's role in fighting the stagnation, inflation, and interest rates shall be evident in the next few months to see the measures they take to change these three problems the United States's economy is experiencing.

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Dollar Hits Record Low Versus Euro

The dollar sank to a new low against the euro after the release of three disheartening economic reports Tuesday.

The dollar also hit floating-era lows against the Brazilian real and New Zealand dollar, or "kiwi."

The 15-nation euro leaped to $1.4982 before settling at $1.4967, its previous record, in late New York trading. On Monday, the euro was worth $1.4825. The euro's previous high of $1.4967 was set on Nov. 23.

The New York-based Conference Board said its Consumer Confidence Index fell to 75 in February from 87.3 in January, the index's lowest level since February 2003. The reading was below analysts' expectations.

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This article addresses the recent economic report that was released regarding the value of the American dollar and the euro. According to the article, the dollar hit an all-time low compared to the euro, the Brazilian real, and the New Zealand dollar ("kiwi"). Also the Consumer Confidence Index has fallen to seventy-five which is an all-time low since February 2003, dropping from 87.3 in January. Also the inflation rate has increased by one percent which is more than anticipated; this rise is contributed to the rising oil and food costs. This article shows the fluctuation of the United States's economy. It is the government's "job" to make the economy achieve more stable levels, so the government should attempt to implement policy to allow this to occur.

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Industrial Production Up Slightly

Industrial production grew slightly in January, according to a report released Friday by the Federal Reserve.

Industrial production rose 0.1% in January from the previous month, meeting the growth expectations of economists surveyed by Briefing.com.

Capacity utilization for all industries, a measure of operating rates for the nation's factories, remained flat at 81.5%. Economists had expected utilization to slip to 81.4%.

Industrial production has been volatile over the last year, registering up and down growth since January 2007.

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This article addresses the various effects that the declining economy is having on various types of production. According to the article, while some industries did see increases (industrial production and production of consumer goods), others have seen a serious decline in productivity (production of appliances, furniture, and carpeting and automotive production). This shows the staggering effects that the economy can have on various aspects of life in the United States. If the economy continues to worsen, there will most likely be even less productivity which can eventually lead to a loss of jobs which is harmful for the economy. Therefore, immediate action must be taken so that the United States will not see this destruction come about.

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Oil Muscles Past Faltering U.S. Economy

There was a time when oil prices needed the backing of a strong U.S. economy to reach record levels, but oil prices hit all-time highs again Wednesday even as a recession looms.

Clearly, a strong economy is still necessary to keep oil prices high, but it seems the United States is no longer oil's main driver.

"The really strong economy is on the other side of the world," said Peter Tertzakian, chief energy economist at ARC Financial, a Calgary-based private equity firm.

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This article addresses the recent rise in the cost of a barrel of oil for the United States. According to the article, the US is losing its status as the "main driver" of the price of oil because of its weakening economy. This article also compares the anticipated growth of the United States's economy (1.8 percent) with that of the developing countries (an average of eight percent). This shows the staggering stagnancy that has developed in the US's economy. This article also compares the prices that United States's consumers are paying for gas with the prices others are paying. (The US price: $3. European price: $7. Chinese price: $2.65. Indonesian price: $1.82. Iranian cost: $0.42. Saudi Arabian cost:$0.45.) This comparison shows the amount of taxes the United States is paying for oil, and it also represents the severity of the inflation occurring in the United States.

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White House: Unemployment to stay near 5%

The Bush administration's top economists see annual unemployment remaining just below 5% through 2013, meaning an extended period when the jobless rate would top the full-year average in six of the last 10 years.

The annual outlook of the president's Council of Economic Advisors, released Monday, also projects that the economy will keep growing this year and avoid a recession. In fact, real gross domestic product is forecast to rise by a healthy 2.7% when comparing the fourth quarter of this year to a year earlier.

But the report projects the full-year unemployment rate will rise to 4.9% in 2007, up from 4.6% each of the last two years. And it expects the unemployment rate will stay at the 4.9% rate in 2009 before starting to retreating slightly to 4.8% in each of the following four years.

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This article addresses the projected economy for the United States. According to the article, unemployment is projected to remain under 5% until 2013. Also according to Edward Lazear, there have been policies and legislations implemented that will hopefully keep the economy on the projected forecast. The Council of Economic Advisors sees soft job growth for the next six years. President Bush supports and has shown excitement about the new legislation that will give most taxpayers hundreds of dolalrs in tax rebates. Bush also asserted that the economy is sound for the long run, but there are uncertainties for the short run. This assertion shows that the government has made decisions to boost the economy in the long run, but now they must take action that will impact the economy in the short run as well.

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Bush: Economy faces risks but foundation sound

President George W. Bush said on Monday the U.S. economy was currently facing heightened risks, but its foundation was solid and its long-term outlook was strong.

"This report indicates that our economy is structurally sound for the long-term and that we're dealing with uncertainties in the short-term," Bush told reporters after signing his annual economic report to Congress.

The report did not alter the White House forecast that the U.S. economy would grow 2.7 percent in 2008, a far rosier picture than private-sector economists who have predicted growth of just 1.6 percent this year.

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According to this article, President Bush believes that the United States's economy is stable for the long run, but does face some risks for the short run. The government has created a stimulus package amounting to $152 billion that supplies tax rebates and business incentives in order to lower the risk of a recession. Bush plans to sign the stimulus package on Wednesday, February 13, and rebates should begin going out in May. This article also focuses on external relations with other nations that can boost our economy, such as free trade agreements with Colombia, Panama, and South Korea. This article concludes with the assertion that we must just allow the economy to adjust and that there is no need to panic. This shows that the United States has learned from the past, as in the Panic of 1907 and the Great Depression. It is best to allow the economy to adjust and level out itself, rather than panicking and taking such drastic measures as withdrawing all of your money from an account. If we all panicked, there would be the possibility of a similar occurrence as the Great Depression.

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