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Sunday, June 26, 2011

Wells Fargo's Weekly Economic Financial Commentary - June 24, 2011

- The U.S. government agreed to release 30 million barrels of petroleum from the Strategic Oil Reserves, while other countries – represented by the International Energy Agency – agreed to release an additional 30 million barrels.
. The release of reserves is expected to be made at a rate of 2 million barrels per day, and is intended to relieve the world’s oil supply problems stemming from the unrest in Libya.
. It is doubtful as to whether this action will have any long lasting effect on the price of oil, as the 60 million barrels represent just 0.2 percent of annual world oil consumption.
- New home sales fell 2.1 percent during May, while new home inventories fell to a record low of 166,000 units.
- First quarter GDP growth was revised upward to 1.9 percent versus previous reports of 1.8 percent growth.
. The GDP price deflator, meanwhile, was revised up to 2.0 percent from 1.9 percent during the first quarter, and the core PCE deflator was raised to 1.6 percent from 1.4 percent.
- Durable goods orders came in at 1.9 percent versus a consensus estimate of 1.5 percent, as a rebound in commercial aircraft orders fueled the gain.
. Excluding transportation durable goods orders were below expectations, growing 0.6 percent versus estimates of 0.9 percent.

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