While some days in August lived up to its "dog days of summer" moniker, the stats suggested anything but. The month reported several stronger-than-expected key economic releases beginning with the July employment report that showed a loss of just 247,000 jobs compared with a projected loss of 320,000, with the unemployment rate slipping to 9.4% from 9.5%, and concluding with a better-than-expected Chicago PMI for August at 50 versus a consensus call of 48, and up from 43.4 in July.

The housing reports were also encouraging with July new home sales, jumping 9.6% with months' supply dropping to 7.5 months from 8.5 months in June, while July existing home sales rose 7.2% on a seasonally adjusted basis. Home sales were helped by historic affordability levels and the $8,000 first-time home buyer tax credit. Second-quarter home price data reported a slowing in home price declines. According to the Federal Housing Finance Agency's (FHFA) House Price Index, home prices declined 6.1% in the second quarter from a year ago compared to negative 7.1% in the first quarter, and Standard & Poor's/Case-Shiller recorded an annualized price decline of 14.9% in their National Home Price Index for the second quarter compared with negative 19.1% in first quarter.

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