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Market
Comment
Mortgage bond prices finished the week slightly higher which put a little downward pressure on rates. Trading was negative to start the week but slowly recovered as stocks got crushed mid-week. The U.S. Administration’s announcement of a new Fed Chair nomination along with high tech company valuation concerns dominated trading. The data also had some surprises. ISM Index was 52.6 vs 48.5. ADP employment came in at 22K vs 48K which buffered some earlier selling pressure. Weekly jobless claims were 231K vs 212K. Mortgage interest rates finished the week unchanged to better by approximately 1/8 of a discount point.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| ADP Employment Weekly |
Tuesday, Feb. 10,
8:30 am, et
|
Up 7K
|
Important. An indication of employment. Weakness may bring lower rates.
|
| Retail Sales |
Tuesday, Feb. 10,
8:30 am, et
|
Up 0.5%
|
Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
|
| Q4 Employment Cost Index |
Tuesday, Feb. 10,
8:30 am, et
|
Up 0.7%
|
Very important. A measure of wage inflation. Weakness may lead to lower rates.
|
| Employment-JAN Data |
Wednesday, Feb. 11,
8:30 am, et
|
4.4%,
Payrolls +70K
|
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
|
| Weekly Jobless Claims |
Thursday, Feb. 12,
8:30 am, et
|
230K
|
Important. An indication of employment. Higher claims may result in lower rates.
|
| Existing Home Sales |
Thursday, Feb. 12,
10:00 am, et
|
4.25M
|
Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
|
| Consumer Price Index |
Friday, Feb. 13,
8:30 am, et
|
Up 0.3%,
Core up 0.3%
|
Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates.
|
Employment Cost Index
The employment cost index is a quarterly report issued by the U.S. Bureau of Labor Statistics. The release measures the growth of wages, salaries, and benefits costs over a certain period of time.
The ECI serves as a key indicator of labor cost trends in economic analysis. It is used by the Federal Reserve to assess inflationary pressures from the labor market, as rising compensation can contribute to broader price increases if passed through to consumers. Employers reference it for compensation benchmarking and planning adjustments, while policymakers and researchers apply it to evaluate wage dynamics separate from employment shifts. Though ECI figures are usually weeks old, the data remains the best indicator of employment price pressures considering it factors employees’ total compensation.
If wage pressures become evident, higher expectations of inflation also tend to arise. However, increasing compensation does not necessarily lead to increased inflationary pressures. Oftentimes, increased productivity enables employers to increase compensation without increasing the costs of their goods or services. Be cautious heading into this release.
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