Economic News Mash-Up: US Mortgage Report, IMF U.S. Growth Forecasts, Euro Zone Consumer Confidence

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Economic News Mash-Up: US Mortgage Report, IMF U.S. Growth Forecasts, Euro Zone Consumer ConfidenceU.S. home mortgage applications surged last week, including refinancing and purchasing applications, reported the Mortgage Bankers Association on Wednesday.

MBA disclosed that its seasonally adjusted gauge of mortgage application activity, which tracks both home purchase and refinancing demand, edged up 2.4 percent in the week through July 18. For refinancing alone, the index rose 4.1 percent while that for home purchase mortgages inched 0.3 percent higher, reported Reuters.

Meanwhile, the International Monetary Fund forecasted the U.S. economy to expand 1.7 percent this year, mostly due to the weak first quarter growth. The U.S. gross domestic product shrank 2.9 percent in the first three months of 2014, as sluggish housing markets, declining exports and weaker restocking by companies weighed on growth.

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“Still, the drag on growth from the first quarter contraction will not be offset,” IMF staff said in their yearly analysis of the U.S. economy.

The IMF noted that the aging U.S. population means that the economy will not grow beyond 2 percent in the long run unless significant reforms are enacted such as job training, more infrastructure spending and immigration and tax changes as well as childcare support to entice more workers into the labor market.

Across the Atlantic, preliminary data released by the European Commission showed that euro area consumer confidence plunged more than estimated in July, fuelling concern over the bloc’s economic recovery.

Consumer confidence fell to -8.4 in July compared with -7.5 a month earlier. This was the weakest level since April, when the measure was -8.6. Analysts surveyed by Reuters had expected the consumer confidence to stand at -7.5 in July. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com