Market Comment Mortgage bond prices finished the week higher, which pushed rates a little lower. Rates were slightly positive the beginning of the week tied to the weaker than expected data. Industrial production fell 0.1% and capacity utilization printed at 78.9. Traders expected a 0.2% production increase and utilization at 79.3. Producer prices rose 0.2% in October and the core value, which excludes volatile food and energy costs, rose 0.4%. The core figure was higher than the expected 0.1% increase, which was not rate friendly. Weekly jobless claims printed at 291K versus the expected 285K, which was rate friendly. Mortgage interest rates finished the week better by approximately 3/8’s of a discount point. LOOKING AHEAD
Productivity Productivity is the rate at which goods or services are produced. It is most commonly defined in terms of labor, which is the contribution of people to the process. Labor costs represent about two thirds of the value of the output produced. The Bureau of Labor Statistics of the US Department of Labor releases the most widely cited productivity statistics quarterly and annually. Increased productivity is often credited for economic growth with little signs of inflation. Productivity is significant in that as it increases, businesses can produce more with the same or less input. This wealth building effect is vital to the US economy. As productivity increases, the US economy generally performs better. As productivity decreases, the economy generally suffers. While the bond market generally favors signs of weakness in the economy, bonds tolerate growth as long as the economic environment shows little or no inflationary pressures. Keep in mind that rates remain very favorable. Now is a great time to avoid the uncertainty surrounding continued market volatility.
Copyright 2014. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied. |
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