Chandler Bond Market Review

Economic Roundup October 2013

Consumer Prices
In August, overall CPI inflation rose to 1.5% on a year-over-year basis from 2.0% in July. The year-over-year Core CPI (CPI less food and energy) rose slightly to 1.8% from 1.7%. The core inflation rate is still trending below the Fed’s long-term goal of 2.0% and remains below the trigger rate for policy action of 2.5%.

Retail Sales
In August, Retail Sales rose 4.7% on a year-over-year basis. On a month-over-month basis, Retail Sales increased 0.2% in August, which was below the 0.5% consensus forecast; however, the gain in July was revised up to 0.4% from 0.2%. Overall, recent consumer spending trends have been healthy, but not robust.

Labor Markets
The September employment report has been delayed due to the federal government shutdown. The market was expecting payroll growth of about 184,000 in September, following lower than expected growth of 169,000 in August.

Housing Starts
Single-family housing starts rose 7.0% in August to 628,000 from 587,000 in July. Housing permits fell 3.8% in July. Recent housing data has been mixed but mostly favorable. 

Credit Spreads October 2013

 

Economic Data October 2013

 

 

 

RISKS AND OTHER IMPORTANT CONSIDERATIONS

This report is provided for general information purposes only and should not be construed as specific legal, tax, or financial planning advice. All opinions and views constitute judgments or relevant information as of the date of writing and such information may become outdated or superseded at any time without notice. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy. This information should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit, and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions,especially during periods of rising interest rates.

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