Market Comment
Mortgage bond prices finished the week near unchanged which kept rates in check. Rate movements were limited for a change. Boston Fed President Rosengren said the recent employment report was “disappointing” but noted that it wasn’t a sign of a deteriorating economy. Productivity in Q1 fell 0.6% and labor costs rose 4.5%. That data was near expectations and resulted in very little market movement. All of the Treasury auctions showed solid foreign demand. Global economic concern played heavily into trading. A European central bank noted, “the global economy remains weak despite very stimulatory monetary policy and significant downside risks remain.” Weekly jobless claims were 264K, about as expected. Consumer sentiment was 94.3 versus the expected 94 reading. Mortgage interest rates finished the week near unchanged.
Retail Sales Retail sales data is the first indication of weakness or strength in consumer spending released each month. The Bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods. This data provides the consumption part of the gross domestic product. Retail sales data represents merchandise sold for cash or credit by retailers. Durable goods, such as autos, make up 35% of the figure. The balance consists of non-durables such as gasoline, restaurants, and general merchandise. There are several drawbacks to the report. The data covers purchases of goods only, not services. It is also not adjusted for inflation and is extremely volatile. Economists are concerned that the current economic uncertainty will curtail consumer spending.
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