M E MO R A N D U M
TO: Mayor and Council Members DATE: September 14, 2007
THROUGH: Isaiah Hugley SUBJECT: MONTHLY INVESTMENT City
Manager REPORT
FROM: Pamela J. Hodge
Finance Director
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The following is the August 2007 investment report and is submitted to the
Mayor and Council summarizing the Investment Portfolio, Overall Portfolio,
Portfolio Highlights and the Monthly Economic Highlights
August 2007
INVESTED PORTFOLIO
August 2007 August 2006 July 2007 Change
Total Invested $126,178,144 $96,534,555 $123,562,527 2,615,617
Avg. Yield 5.76% 5.97% 5.73% +.03
Avg. Maturity 3.48 3.02 3.54 -.06
Spread/5-year Treas +152 bps +128 bps +117 bps + 35 bps
OVERALL PORTFOLIO
August 2007 August 2006 July 2007 Change
Total Invested $173,112,366 $143,512,866 $174,034,175 -921,809
Avg. Yield 5.61% 5.73% 5.59% +.02
Avg. Maturity 2.54 2.03 2.51 +.03
Spread/2-yearTreas +148 bps +95 bps +107 bps + 41 bps
PORTFOLIO HIGHLIGHTS
Georgia Fund I interest rate was 5.2666%, down from 5.3001% in July.
CB&T Now interest rate was 4.90%, unchanged from June. (fed funds ? 35 bps)
MONTHLY ECONOMIC HIGHLIGHTS
The Federal Reserve met August 7 and voted to hold its interest rate target at
5.25%, where it has been for almost a year. Credit-market turmoil continues to
threaten the economy and most economists expect the FOMC to lower its target
rate by at least a quarter-percentage point at the September 18 meeting.
The Commerce Department reported real gross domestic product (GDP) increased at
an annual rate of 4.0% in the second quarter of 2007, due to improvements in
international trade and business investment. But, the growth spurt could be
short-lived. There are concerns that the recent turmoil in financial markets
could seriously dampen economic activity in the second half of this year.
The Labor Department reported the consumer-price index (CPI), a measure of
inflation on the retail level, rose 0.1% in July. Core CPI, excluding food and
energy, was up 0.2%. The year-on-year core CPI inflation rate was 2.2%.
The Labor Department reported the producer-price index (PPI), a measure of
inflation at the wholesale level, rose 0.6% in July, more than reversing June?s
0.2% drop. However, the core PPI, which excludes food and energy, was up just
0.1%.
The Conference Board Consumer Confidence Index fell in August to 105 from 111.9
in July. The decline was attributed to a softening of business and
labor-market conditions as well as volatility in financial markets and
continued subprime housing woes.
Nonfarm payroll employment fell by 4,000 in August, the first clear evidence
the turmoil in the financial markets is spilling over into the real economy.
The unemployment rate was unchanged at 4.6%, but only because the labor force
fell sharply. In Columbus, our unemployment rate jumped from 5.4% in June to
5.7% in July, due to an increase in the number of unemployed and an increase in
the labor force.
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