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Market
Comment
Mortgage bond prices finished the week sharply lower which put significant upward pressure on rates. Rates worsened Monday, Tuesday, and Thursday with only a slight rebound Friday morning. The Middle East conflict reignited inflation fears as oil prices hit six-week highs. There were very few data releases, and most were overshadowed by the global events. Leading economic indicators fell 0.2% vs expected 0.1% decline. Weekly ADP employment was 16.5K vs 19.75K the prior week. Weekly jobless claims were 187K vs 212K. New home sales were 628K vs 610K. Mortgage interest rates finished the week worse by approximately 7/8 of a discount point amid considerable negative volatility.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Durable Goods Orders |
Monday, July 27,
8:30 am, et
|
Up 1.6%
|
Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
|
| FHFA House Price Index |
Tuesday, July 28,
10:00 am, et
|
Down 0.1%
|
Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates.
|
| Consumer Confidence |
Tuesday, July 28,
10:00 am, et
|
92.1
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
| Fed Meeting Adjourns |
Wednesday, July 29,
2:15 pm, et
|
No rate changes
|
Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
|
| Personal Income and Outlays |
Thursday, July 30,
8:30 am, et
|
Up 0.3%,
Up 0.4
|
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
|
| PCE Core Inflation |
Thursday, July 30,
8:30 am, et
|
Up 0.1%
|
Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
|
| Q2 Employment Cost Index |
Friday, July 31,
8:30 am, et
|
Up 0.8%
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Very important. A measure of wage inflation. Weakness may lead to lower rates.
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| U of Michigan Consumer Sentiment |
Friday, July 31,
10:00 am, et
|
54.4
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Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
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Income and Outlays
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
The prior release showed an increase in wages, salaries, and spending. If wages falter that could adversely affect consumer spending and the entire US economy. Decreased or stagnant wages coupled with tighter borrowing restrictions make it difficult for consumers to spend money. It is important to note that no single economic indicator can consistently predict the future of the economy. However, the personal income and outlays report is a closely watched release. The consumer remains a vital component of the US economy.
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