Ft Lauderdale Lifestyle Blog

MARKET RECAP

Last week, a leading gauge of U.S. home sales showed surprising strength. April pending home sales rose 6.3% from March to an 88.2 index in April, the highest level in six months, the National Association of Realtors reported.

More encouraging economic news was forthcoming from the retail sector, where sales rose twice as much as forecast in May, as Americans snapped up electronics, clothes and furniture, evidence that they aren't hoarding their tax-rebate checks or using them just to buy gasoline. (Indeed, sales excluding gas increased 0.8%.)

Still, signs of economic weakness persist. Bank repossessions more than doubled and foreclosure filings rose 48% in May, according to RealtyTrac, which also reported that one in every 483 homeowners lost their house to foreclosure or received either a default warning or notice that their home would go up for sale at auction.

A surge in consumer prices was another sign of continued weakness. The consumer price index increased 0.6% in May, the most since November, after a 0.2% gain the prior month. The recent surge in oil and food prices has caused traders to bet that the Federal Reserve will increase interest rates as soon as September, following seven rate reductions in the past nine months.