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Expert Update - 07.17.2020


The CoreLogic National House Price Index, a repeat sales measure, rose 0.7% in May (not seasonally adjusted). The index rose 4.8% from one year ago, the fastest annual pace of growth since November 2018.1


The just-released June IMG growth projections are calling for 2020 global economic activity to contract by 4.9% or $4.3 trillion, compared to a forecasted contraction of 3% in the April report. By comparison, in 2009, during the last global recession, GDP declined by 0.1%. In 2020, US GDP is now expected to shrink 8% compared to the 5.9% projected in April. European GDP is projected to decline by 10.2% vs 7.5%.2


The producer-price index unexpectedly fell in June, signaling subdued inflation that should allow the Federal Reserve to keep injecting money into the economy. The PPI for final demand stood at minus 0.2% in June, down from May’s 0.4% increase. Economists polled by The Wall Street Journal expected 0.4% growth. The report from the Labor Department on Friday showed that energy prices ticked up, but were offset by deflation in final demand services and food. In April, amid the Covid-19 pandemic, producer prices fell by 1.3%, the biggest decline since December 2009.3


Mortgage applications rose 2.2% for the week ending July 3, according to the Mortgage Bankers Association. Purchase applications grew 5.3% to the highest level since January 2009. Refinance applications edged up 0.4%. From a year ago, purchase and refinance applications were up 18.0% and 87.5%, respectively.4


Comparing average scores of the first three golf tournaments played this year without fans to scores in identical tournaments in 2019 found that scores were unchanged in the first event, but fell 2 strokes in the second and 1 stroke in the third. When comparing scores of just those who competed in both years, the scores fell by 1.2, 1.5 and 1 stroke, respectively. Fewer fans, better golf?5


Sources: 1CoreLogic; 2Elliot Eisenberg, PhD; 3Wall Street Journal; 4Fannie Mae; 5Elliot Eisenberg, PhD

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