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It’s Not All About Oil

March 9, 2011 – 7:35 pm

As oil dominates the headline news other important economic data gets forgotten. For instance this morning an important leading economic indicator, and one that affects the housing market directly was released. Mortgage applications for last week jumped up 15.5%. That is the largest increase since June 11 and the highest number of mortgage applications since December 10th.

Also, if you split the applications between refinancing and new home purchases it was up 17.2% and 12.5% respectively, a surprising improvement in new home mortgage applications.

I realize this is only one week and one data point but usually this kind of stark increase would make the headlines. Also, this is another indication that the job market is improving. Last week it was reported that 197,000 new jobs were produced in February. It is not a coincidence that mortgage applications go up when the job market is slightly improving. Both these numbers will boost confidence in our improving economy as well.

The problem is that higher oil and gas prices pulls the economy in the opposite direction. It’s a tug of war.

Good Trading
Steve Peasley

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