| Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. Existing home sales printed at 5.38M units. This was lower than the expected 5.45M. Housing prices continued to climb, according to the FHFA Housing Price Index prices rose 0.2% in May and were up 6.4% over the last 12 months. New home sales printed at 631K vs. the expected 670K. Weekly jobless claims printed at 217K and continuing claims, a summation of all receiving benefits, at 1,745K. Claims were expected at 215K and continuing claims at 1,751K. Durable goods orders rose 1%, much weaker than the expected 3% increase. We ended the week worse by 1/8 to 1/4 of a discount point.
LOOKING AHEAD
Economic
Indicator |
Release
Date & Time |
Consensus
Estimate |
Analysis |
| Personal Income and Outlays |
Tuesday, July 31,
8:30 am, et |
Up 0.3%,
Up 0.2% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation |
Tuesday, July 31,
8:30 am, et |
Up 0.2% |
Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q2 Employment Cost Index |
Tuesday, July 31,
8:30 am, et |
Up 0.6% |
Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| Consumer Confidence |
Tuesday, July 31,
10:00 am, et |
126.5 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment |
Wednesday, Aug. 1,
8:30 am, et |
175K |
Important. An indication of employment. Weakness may bring lower rates. |
| ISM Index |
Wednesday, Aug. 1,
10:00 am, et |
60.5 |
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Fed Meeting Adjourns |
Wednesday, Aug. 1,
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. |
| Weekly Jobless Claims |
Thursday, Aug. 2,
8:30 am, et |
215K |
Important. An indication of employment. Higher claims may result in lower rates. |
| Factory Orders |
Thursday, Aug. 2,
10:00 am, et |
Up 0.4% |
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Employment |
Friday, Aug. 3,
8:30 am, et |
4%,
Payrolls +215K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
PCE
The US Department of Commerce’s Bureau of Economic Analysis releases the core PCE price index. The report provides the average increase in costs for personal consumption expenditures. PCE is significant in that the Fed uses it in determining inflation as opposed to the prior use of the consumer price index. The PCE includes the price of spending for and on behalf of households. This includes health care spending paid for a household by a business. The CPI only reflects out of pocket expenses paid directly by consumers.
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