ECONOMIC NEWS OF LAST WEEK

The U.S. trade deficit fell to $65.7 billion in February, a 4.2% decline from January's record imbalance of $68.7 billion, as U.S. purchases of foreign oil, automobiles and other goods decreased. The deficit was the third highest on record.

Meanwhile, the U.S. government rang up a record $85.5 billion budget deficit in March, with the Treasury Department reporting April 12 that federal spending totaled $250 billion for the month against government receipts of only $164.5 billion. The increase in federal spending was up 13.7% from March 2005.

Industrial production at factories, mines and utilities rose by 0.6% in March, the Federal Reserve said April 14. The better-than-expected increase suggests the economy is heading toward summer with decent momentum.

Sales at the nation's retailers were also up 0.6% in March, better than the 0.5% gain that economists were forecasting, the Commerce Department reported April 13. Among the merchants reporting gains were auto dealers, furniture stores, building and garden centers, sporting goods, and books and music stores.

In other news, the National Association of Realtors projected that 2006 sales of new and existing homes would experience their third-best year ever, after 2005 and 2004. Also on April 13, the 10-year Treasury note -- a touchstone for various consumer, corporate and government borrowers -- surpassed 5% for the first time since June 2002.

(Courtesy of Louise Rose, ELB Mortgage Brokers)