ALM First Financial Advisors

Economic Indicators

Economic Release Actual Expected Prior

04/30 GDP Price Deflator 2.6% 3.00% 2.4%

06/25 FOMC Rate decision expected - 2.00% 2.00%

07/11 Import Price Index (MoM) 2.60% 2.00% 2.60% Rev

07/15 PPI Ex Food & Energy (MoM) 0.2% 0.3% 0.2%

07/15 PPI Ex Food & Energy (YoY) 3.0% 3.2% 3.0%

07/15 Producer Price Index (MoM) 1.8% 1.4% 1.4%

07/15 Producer Price Index (YoY) 9.2% 8.7% 7.2%

07/15 Retail Sales 0.1% 0.4% 0.8% Rev

07/15 Retail Sales Less Autos 0.8% 1.0% 1.2%

07/16 Consumer Price Index (MoM) 1.1% 0.7% 0.6%

07/16 Consumer Price Index (YoY) 5.0% 4.5% 4.2%

07/16 CPI Ex Food & Energy (MoM) 0.3% 0.2% 0.2%

07/16 CPI Ex Food & Energy (YoY) 2.3% 2.4% 2.3%

07/17 Housing Starts 1066K 960K 977K Rev

07/24 Existing Home Sales 4.86M 4.94M 4.99M

07/24 Existing Home Sales MoM -2.6% -1.0% 2.0%

07/25 Durable Goods Orders 0.8% -0.3% 0.1% Rev

07/25 Durables Ex Transportation 2.0% -0.2% -0.5% Rev

07/25 New Home Sales 530K 503K 533K - Rev

07/25 New Home Sales MoM -0.6% -1.8% -1.7% Rev

07/29 Consumer Confidence 51.9 50.1 51.0 Rev

07/31 GDP Price Index 1.1% 2.4% 2.6% Rev

07/31 Gross Domestic Product 1.9% 2.3% 0.9% Rev

07/31 Personal Consumption 1.5% 1.7% 0.9% Rev

08/01 Average Hourly Earnings YoY 3.4% 3.4% 3.4%

08/01 Change in Nonfarm Payrolls -51k -75k -51k Rev.

08/01 ISM Manufacturing 50.0 49.0 50.2

08/01 Unemployment Rate 5.7% 5.6% 5.5%

08/05 ISM Non-Manufacturing 49.5 48.8 48.2

08/07 Continuing Claims 3311K 3255K 3280K Rev

08/07 Initial Jobless Claims 455K 425K 448K

Market Commentary

August 7, 2008

Treasury prices are higher this morning after jobless claims for the previous week rose to a six year high. Weekly jobless claims rose by 7,000 from the previous week to 455,000, the most since March 2002. Continuing claims rose to 3,311,000, which is a four year high. AIG, the world’s biggest insurer, reported at $5.36 billion loss in the 2nd quarter, its third consecutive quarterly loss. The quarterly loss included $5.57 billion of writedowns on its super senior credit default swap portfolio and a $6.08 billion net realized loss from its investment portfolio. The company’s stock has fallen this morning by the most since the 1987 stock market crash after the company said that it won’t rule out raising more capital.

The European Central Bank (ECB) decided today to keep its benchmark interest rate at 4.25%. ECB President Jean-Claude Trichet said the bank remains focused on inflation even as economic growth slows. Trichet stated that “risks to price stability over the medium term remain on the upside” while economic growth risks “are materializing”.

Jason Haley
Fixed Income Strategist