Market Comment
Mortgage bond prices finished the week higher which helped rates improve slightly. Rates started higher Monday morning in carryover from the selling pressure from the recent strong payrolls data. That trend reversed and rates generally fell throughout the rest of the week. Productivity in Q2 fell 0.5% and unit labor costs rose 2%. Economists’ expectations were for productivity to rise 0.5% and unit labor costs to increase 1.7%. Weekly jobless claims printed at 266K and continuing claims, a summation of all receiving benefits, at 2,155K. That data was near expectations. Producer prices fell 0.4% and retail sales were unchanged. Expectations were for PPI to rise 0.1% and sales to increase 0.4%. Mortgage interest rates finished the week better by approximately 1/4 of a discount point.
Hurricane Season The Federal Reserve is clear that weather plays a significant part in the overall economy. Their last report on industrial production indicated, “The index for utilities rose 2.4 percent as a result of warmer weather than is typical for June boosting demand for air conditioning.”
The U.S. enters the heart of hurricane season and the weather is almost certain to make headlines in the months ahead. The U.S. Energy Information Administration indicates that “during major disruptions such as hurricanes or power outages, the Department issues situation reports to provide information about a disruption’s effect on gasoline supply and other energy infrastructure and supply issues.” While a specific area may have no threat of a hurricane the overall impact ripples through the entire economy. |
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