Finance Highlights 2007 0925 - Laserfiche WebLink

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CHANDLER ECONOMIC ROUiVDUP Ji~~ rnnrsnTCeMeHr CONSUMER PRICES During May, the economy's headline inflation reading rose as the year-over-year CPI increased to 2.7% from 2.6% in April. The year-over-year Core CPI (CPI less food and energy) declined to 2.2%. While Core CPI remains above the FOMC's comfort level, the trend has been relatively positive over the past six months. Going forward, market observers will watch carefully to see if there is a trend towards higherar lower inflation. LABDR MARKETS The June non-farm payroll employment report showed an increase of 132,000 jobs, which was slightly higher than consensus expectations. The reports for the previous several months were also revised higher. The unemployment rate remained at 4.5%. The six-month average for non-farm payroll employment is now 145,000 jobs. June's employment report indicates continued moderate growth in the labor market. HOUSINC3 STARTS Single-family housing starts declined by 3.4% in May, to a 1.17 million annual pace. This follows April's reading of 1.21 million. Single family housing permits also declined. While the housing sector has not shown signs of a strong rebound, the pace of decline has slowed. Going forward, market participants will watch closely to see whether or not the decline in the housing market has run its course. MANUFACTURING During June the ISM Manufacturing Index increased to 56.0 from May's reading of 55. ISM readings below 50 indicate that the manufacturing sector of the economy is contracting; readings above 50 indicate thatthe manufacturing sector is in an expansionary phase. The recent trend in ISM readings indicates that the manufacturing sector of the economy remains relatively healthy. Nevertheless, it is important to remember that manufacturing constitutes a smaller portion of the US economy than in the past. CREL]lT SF'R~ADS WIDER 3-month top-rated commercial paper 0.41 0.47 (0.06) 2-year AA corporate note 0.39 0.45 (0.06) 5-year AA corporate note 0.62 0.71 (0.09) 5-year Agency note 0.36 0.32 0.04 Source- Bloomberg Data as of 6!30/07 MIXED EcC]NQMIG DATA Trade Balance (58.5) $Bln APR 07 (62.4) $Bln MAR 07 (62.3) $Bln APR 06 GDP 0.7% MAR 07 2.5% DEC 06 5.6% MAR 06 Unemployment Rate 4.5% JUN 07 4.5% MAY 07 4.6% JUN 06 Prime Rate 8.25% JUN 07 8.25% MAY 07 8.25% JUN 06 CRB Index 315.74 JUN 07 31 1.46 MAY 07 346.39 JUN 06 Oil (West Texas Int.) $70.68 JUN 07 $64.01 MAY 07 $73.93 JUN 06 Consumer Price Index (y/o/y) 2.7% MAY 07 Z.6% APR 07 4.2% MAY 06 Producer Price Index (y/o/y) 4.1 % MAY 07 3.2% APR 07 4.5% MAY 06 Dollar / EURO 1.35 JUN 07 1.35 MAY 07 1.28 JUN 06 Source: Bloomberg © 2007 Chandler Asset Management, Inc, An Independent Registered Investment Adviser. The information contained herein was obtained from sources we believe fo be reliable, but we do not guarantee its accuracy Opinions and forecasts regarding industries, companies, and/or the economy are al(subject to change at any time, based on market and other conditions, and should not be construed as a recommendation. page 3 CHANDLER ASSET MANAGEMENT ^ 9255 Towne Centre Drive, Ste 350 ^ San Diego, CA 92121 ^ 800 317 4747 ^ chandlerasset.com