Daily News 10/22/14
October 22, 2014
Wednesday – October 22
Consumer prices edged higher in September led by rising costs for food and housing, though offset by a decline in gas prices at the pump. The Consumer Price Index rose by 0.1% last month after a 0.2% decline in August and above the 0.0% that was expected. Within the report it showed that food costs were up 0.3%, beef prices up 2% (up 17% since January), while dairy products have been on a steady rise. Energy prices have declined 0.6% in the past 12 months and with lower prices at the gas pumps, it should put extra cash in the pockets of consumers for the holiday shopping season.
Home loan rates are now at 18-month lows, as reported by mortgage provider Freddie Mac last week. The decline in rates have led consumers to embark on refinancing their current mortgages at a rapid pace. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 11.6% last week with the refinance index soaring by a whopping 23%. The refinance index now stands at its highest level since November 2013 as consumers scramble to lock in the low rates. However, as late fall and winter sets in, which is typically a lull for buying homes, the purchase index fell by 5%.
In an unexpected move, Minneapolis based Target Corp. announced that it will offer free holiday shipping on all items as the retailer looks to compete better with the Amazon’s of online purchasing. The free shipping will begin Wednesday and last through December 20. Target is looking to bounce back from a weak 2013 holiday shopping season after the company suffered a major data breach in the early stages of the season, which cost Target $148 million. A spokesperson “for Target said “we believe our free shipping off will create excitement and incremental sales for Target.”