Key Findings
As we all begin to look ahead to 2011, we have taken the time to gather some key findings that we found interesting about the current state of the economy and what lies ahead in the new year.
- No increase for social security next year. Social Security Administration has stated inflation has been too low since the last increase in 2009 to justify a raise in 2011. This will affect more than 58 million retirees and disabled Americans.
- The Federal Reserve is discussing taking further steps to jumpstart the economy by instituting a Treasury bond program. However, at this point they are not sure how big the program needs to be according to Chairman Ben Bernanke during comments made on October 15, 2010. This plan would attempt to ward off deflation. The thought is that the bond purchases would stimulate buying, lower unemployment and lower longer term interest rates. Fed policymakers will more than likely announce such a program at their November meeting.
- Unemployment rate as of September is 9.6%.
- Retail sales are up for the third month straight.
- Paul Dales, chief U.S. economist at Capital Economics, has changed his forecast for consumer spending to somewhere between 2.5 percent and 3 percent, up from his original 2 percent estimation. Consumer spending makes up 70% of economic activity.
- Businesses increased their inventories for the eighth consecutive month as of August.
- Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.7 percent in the second quarter of 2010.
- If you have a decent amount of equity in your home and have good credit, now may be an appropriate time to refinance. Below is a recent rate table from Wells Fargo Home Mortgage:
Product Interest Rate
APR
Conforming 1and FHA Loans
30-Year Fixed 4.250% 4.433%
30-Year Fixed FHA 4.250% 5.087%
15-Year Fixed 3.625% 3.943%
5-Year ARM 2.750% 3.083%
5-Year ARM FHA 2.750% 2.948%
Larger Loan Amounts in Eligible Areas – Conforming and FHA.1
30-Year Fixed 4.375% 4.508%
30-Year Fixed FHA 4.375% 5.165%
5-Year ARM 3.125% 3.167%
Jumbo1 Loans – Amounts that exceed conforming loan limits1
30-Year Fixed 4.875% 5.012%
5-Year ARM 3.625% 3.343%
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