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Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the rising prices of gold and oil.
- There is slightly good news coming out of two regional branches of the Federal Reserve. The Dallas Federal Reserve district reported an increase in manufacturing activity in June, including hiring activity in July. The Chicago Federal Reserve district reported a slowing in contraction in manufacturing activity.
- Several of the regional Federal Reserve banks are attempting to gauge a timely measure, though qualitative, about economic activity in its respective regions. Because of the qualitative nature, thia data is not followed as closely.
- Gold and oil prices are shooting higher. It could be due to investors seeking shelter of hard assets ahead of the uncertain debt ceiling outcome. It could also be due to better prospects of economic growth later in the year since stock prices are also at high points. Finally, it could also be a reflection of an inflation hedge in light of a very loose monetary policy.
- Higher gold prices have virtually no economic impact, other than for those who want to buy or sell jewelry. However, oil prices have a direct impact. Higher oil prices mean slower economic growth. The initial positive impact of lower oil pricse in releasing oil from the strategic petroleum reserve has largely gone away.
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