What’s Ahead For Mortgage Rates This Week – January 18, 2022

What's Ahead For Mortgage Rates This Week - January 18, 2022

Last week’s scheduled economic reporting focused on inflation with monthly and year-over-year readings on overall and core inflation. Federal Reserve Chair Jerome Powell was confirmed for a second term as Federal Reserve chair.  The University of Michigan released its monthly survey on consumer sentiment and weekly readings on mortgage rates and jobless claims were also released.

Inflation Rises in December; Nears Fastest Growth Pace in 40 Years

Year-over-year inflation rose to a pace of seven percent in December and approached its fastest growth rate in 40 years according to the Bureau of Labor Statistics. Analysts expected year-over-year inflationary growth of seven percent as compared to November’s pace of 6.80 percent. Month-to-month inflation slowed to

0.50 percent as compared to November’s month-to-month growth rate of 0.80 percent.

Housing costs, food, and automotive sectors drove inflation in December. Shortages of computer chips used in vehicles slowed production and increased demand for vehicles. New car prices rose by one percent and used-car prices rose by 3.50 percent month-to-month.

Core inflation, which excludes volatile food and fuel sectors, rose by 5.50 percent year-over-year in December and surpassed the expected reading of 5.40 percent that was based on November’s core inflation rate of 4.90 percent. Rents rose by 0.40 percent for the third consecutive month. Food prices rose by 0.50 percent month-to-month and costs for clothing and furniture also rose.

Federal Reserve Chair Jerome Powell was confirmed for a second term and addressed the Fed’s plans for slowing inflation. Mr. Powell said, “The economy no longer needs or wants the very highly accommodative policies we’ve had in place to deal with the pandemic and its aftermath.”

Energy prices fell by 0.40 percent in December and decreased for the first time since April.

Mortgage Rates Rise. Jobless Claims Mixed

Freddie  Mac reported higher mortgage rates as the average rate for 30-year fixed-rate mortgages rose by 23 basis points to 3.4

Initial jobless claims rose last week with 230,000 first-time claims filed as compared to the prior week’s reading of 207,000 initial claims filed. Analysts expected first-time claims to decrease to 200,000 initial claims filed. Ongoing jobless claims fell to 1.60 million continuing claims filed as compared to the previous week’s reading of 1.75 million ongoing jobless claims filed.5 percent; rates for 15-year fixed-rate mortgages rose 19 basis points and averaged 2.62 percent. The average rate for 5/1 adjustable rate mortgages rose 16 basis points to 2.57 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The University of Michigan’s consumer sentiment index for January reported lower consumer enthusiasm for current economic conditions with an index reading of 68.8 as compared to the expected reading of 70.0 and December’s index reading of 70.6.

What’s Ahead

This week’s scheduled economic reporting includes readings on housing markets and sales of previously-owned homes. Readings on building permits issued and housing starts will be released along with weekly readings on mortgage rates and jobless claims.

FOMC Statement: Fed Policymakers Discuss Easing Accommodations as Economy Improves

FOMC Statement: Fed Policymakers Discuss Easing Accommodations as Economy ImprovesThe Federal Reserve’s Federal Open Market Committee considered easing monetary accommodations implemented in response to stronger economic conditions according to its post-meeting statement issued November 3. The Fed started making trillions in monthly bond purchases when the pandemic started but slowed its purchasing pace to $120 billion per month in June 2020. The Fed will soon reduce its monthly bond purchases to $105 billion monthly.

The Fed said it will continue to purchase bonds until the economy makes “substantial progress” toward its legally mandated goals of achieving two percent inflation and maximum employment. Supply shortages and high demand for goods caused by the pandemic have impacted the overall economy, but labor markets have suffered disproportionately. Pandemic-driven quits and retirements have left many job openings that remain unfilled.  Service-related jobs in hospitality and travel have been especially hard-hit as consumers continued to stay home.

Fed Calls High Inflation “Transitory”

Federal Reserve policymakers continued to call current higher-than-expected inflation “transitory,” but did not explain how long high inflation is expected to last. Supply-chain logjams continued to negatively impact supply and demand for goods and services; in some cases, high demand and short supplies drove inflation higher: “Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors.”

FOMC members did not raise the current benchmark interest rate range of 0.00 to 0.25 percent, but financial markets expect two or more rate hikes in 2022.

Fed Chair Expects Inflation to Remain High into Mid-2022

Fed Chair Jerome Powell commented on high inflation during a press conference given after the FOMC post-meeting statement: “Our baseline expectation is that supply chain bottlenecks and shortages will persist well into next year and elevated inflation as well.” Chair Powell continued: “As the pandemic eases, supply chain issues will abate and growth will move up. As that happens, inflation will decline from today’s elevated levels.”

Mr. Powell further commented that he expected labor markets to strengthen as the delta variant of the covid virus continues to decline. 

What’s Ahead For Mortgage Rates This Week – August 16, 2021

What's Ahead For Mortgage Rates This Week - August 16, 2021Last week’s economic reporting included readings on job openings, inflation, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Job Openings Rise as Inflation Rate Falls

The Labor Department reported a record number of job openings for the fourth consecutive month in June. Job openings rose to 10.1 million available jobs from May’s reading of 9.5 million job openings. Analysts expected job openings to decrease to 9.1 million jobs in June. 

Analysts said that previous headwinds to hiring including generous unemployment benefits and childcare issues may be easing. Workers took advantage of the rising demand for employees to negotiate higher wages and switch jobs for better offers. 

The Consumer Price Index fell by 0.40 percent in July to 0.50 percent as compared to June’s reading of 0.90 percent. The pace of year-over-year inflation remained at 5.40 percent  Core inflation, which excludes volatile food and fuel sectors, fell to 0.30 percent from 0.90 percent. July’s reading showed the impact of food and gas prices on inflation in recent months.

Mortgage Rates Rise, Jobless Claims and Consumer Sentiment Index Fall

Average mortgage rates rose last week as the rate for 30-year fixed-rate mortgages rose by 10 basis points to 2.87 percent. Rates for 15-year fixed-rate mortgages averaged 2.15 percent and were five basis points higher; rates for 5/1 adjustable rate mortgages averaged four basis points higher at 2.44 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. 

Initial jobless claims fell to 375,000 new claims filed as compared to the prior week’s reading of 387,000 first-time claims filed. Continuing jobless claims also fell; 2.87 million ongoing claims were filed last week as compared to the prior week’s reading of 2.98 million continuing jobless claims filed.

The University of Michigan reported its lowest reading for consumer sentiment since 2011. The preliminary reading for August fell to an index reading of 70.2 in August as compared to July’s reading of 81.2. Analysts expected an index reading of 81.3 for August, but rising covid 19 cases attributed to the highly contagious Delta form of the virus tanked consumer sentiment as mask requirements and social distancing guidelines re-emerged in some areas.

What’s Ahead

This week’s scheduled economic releases include readings from the National Association of Home Builders on housing markets, government readings on housing starts, and building permits issued. Retail sales will also be reported.

What’s Ahead For Mortgage Rates This Week – July 19, 2021

What's Ahead For Mortgage Rates This Week - July 19, 2021Last week’s scheduled economic reports included readings on inflation, Fed Chair Jerome Powell’s testimony before the House Financial Services Committee, and the University of Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also released.

Consumer Price Index: June Inflation Grows at Fastest Pace Since 2008

June’s Consumer Price Index showed the fastest pace of inflationary growth in 13 years; inflation grew by 5.40 percent on a seasonally-adjusted annual basis. Used car sales accounted for one-third of the growth, but prices also rose for clothes, food, energy, and travel/hospitality. The year-over-year inflation rate for May was 5.00 percent.

Inflation grew by 0.90 percent month-to-month, which exceeded analyst’s expectations of 0.50 percent growth and 0.60 percent growth in May. The Core Consumer Price Index, which excludes volatile food and energy sectors also grew by 0.90 percent in June as compared to a month-to-month reading of 0.70 percent in May. Analysts expressed concern that the rapid pace of inflation may not slow as quickly as the Federal Reserve predicted.

Fed Chair Jerome Powell Testifies Before House Financial Services Panel

Fed Chair Jerome Powell maintained the Federal Reserve’s earlier prediction that the pace of inflation would ease, but not immediately: “Inflation has increased notably and will likely remain elevated in coming months before moderating.”Mr.Powell said that inflationary growth has come in at a faster pace than the Fed was hoping to see.

Chair Powell identified three factors contributing to current inflationary growth. Weak inflationary growth during the pandemic will drop out of the year-over-year calculation; Production and supply chain constraints have led to sharp price increases after the pandemic. The third factor is a surge in demand for services as the economy reopens.

The Fed Chair said that “it’s a pretty narrow group of things that are producing these high readings.”

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported mixed mortgage rates last week as the rate for 30-year fixed-rate mortgages averaged 2.88 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages rose by two basis points to an average of 2.22 percent. Rates for 5/1 adjustable rate mortgages fell by five basis points to 2.47 percent on average; Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-yar fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell to 360,000 initial claims filed from the previous week’s reading of 386,000 claims filed. Data for continuing jobless claims were not updated last week.

The University of Michigan reported no change in its Consumer Sentiment Index for July with an index reading of 85.5. Analysts expected a reading of 86.3.

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders Housing Market Index, reports on housing starts and building permits, and data on existing home sales. Weekly readings on mortgage rates and jobless claims will also be released.

FOMC Statement: Fed Predicts 2 Interest Rate Hikes in 2023

FOMC Statement: Fed Predicts 2 Interest Rate Hikes in 2023The Federal Open Market Committee of the Federal Reserve said in its post-meeting statement that the Federal Reserve expects to raise its benchmark interest rate range twice during 2023. No rate changes will be made during 2022 as the economy continues to recover from the Covid-19 pandemic. The Fed’s current interest rate range is 0.00 to 0.25 percent.

Fed Expects “Transitory” Inflation

The Fed’s post-meeting FOMC statement said that although Committee members adjusted their forecast for raising the Fed’s benchmark interest rate range, members did not predict long-term inflation and described current upward inflation as “transitory.”

The Consumer Price Index reported that the cost of living jumped in May and drove inflationary growth to a 13-year high of five percent.

11 of 18 FOMC members currently expect two or more rate hikes in 2023; in March, seven members expected one rate hike in 2023. Former Treasury Secretary Larry Summers said that the Fed needs to reconsider its monetary policies based on the two stimulus payments provided to Americans. The Fed has held its benchmark interest rate range to 0.00 to 0.25 percent and continued its monthly purchases of $80 billion in Treasurys and $40 billion in Mortgage-Backed Securities in efforts to support the economy and stabilize financial markets.

The Committee will follow economic news and developments through readings on public health, labor market conditions, inflation, and financial and global news to determine monetary policy adjustments.

Fed Chair Suggests Future Tapering of Bond Purchases

Federal Reserve Chair Jerome Powell said in his post-FOMC meeting press conference that members had their first discussion of tapering the Fed’s bond purchases. Although the Fed has indicated it wants to see “substantial further progress” in the economy before it starts to taper its bond purchases, analysts expected further discussion of tapering bond purchases in FOMC’s July meeting. Reducing bond purchases is considered the first step in moderating the Fed’s accommodative stance on monetary policy.

Chair Powell said that the FOMC will continue to develop monetary policy in consideration of the FOMC’s dual mandate of achieving maximum and an annual inflation rate of two percent over the longer term. Inflation has run below two percent for some time before the pandemic; so a current inflation rate running above two percent would help raise the average inflation rate to the two percent requirement.  

The unemployment rate is improving as businesses and other employers open their doors and restore service to full capacity. Chair Powell cautioned that the economy remains strongly connected to how the Covid-19 virus progresses and said that monetary policy would be adjusted according to how the pandemic impacts the economy.

What’s Ahead For Mortgage Rates This Week – May 17, 2021

What's Ahead For Mortgage Rates This Week - May 17, 2021Last week’s economic reports included readings on inflation, core inflation, and the University of Michigan’s  Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also released.

April Inflation Rate Hits 13-Year High

The federal government’s Consumer Price Index rose by 0.80 percent in April as compared to the March reading of 0.60 percent. Analysts expected inflation to increase by 0.20 percent in April. Core inflation, which excludes volatile food and fuel sectors, rose by 0.90 percent in April. Analysts expected core inflation to grow by 0.30 percent in April which would have been unchanged from the March reading of 0.30 percent Core inflation rose month-to-month at the fastest pace in forty years and grew by three percent year-over-year, which was the highest growth rate since September 2008.

Consumer gas prices surpassed $3.00 per gallon for the first time since 2014; last week’s shutdown of Colonial Pipeline’s main transmission line was expected to drive gasoline prices higher. Prices of used cars and trucks rose 10 percent in April and contributed to a 21 percent increase in used vehicle prices year-over-year. Costs for shelter rose 2.10 percent year-over-year and were 0.0 percent higher month to month. Analysts noted that high inflation rates are caused in part by the low pace of inflation reported during the pandemic. Inflation Growth percentages are higher than they would have been if inflation had not slowed during the pandemic.

Mortgage Rates, Jobless Claims, and Consumer Sentiment Fall

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.94 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.26 percent and were four basis points lower; the average rate for 5/1 adjustable rate mortgages dropped by 11 basis points to 2.59 percent. Discount points averaged 0.70 percent, 0.60 percent, and 0.30 percent respectively.

First-time jobless claims were lower last week with 473,000 initial claims filed as compared to the prior week’s reading of 507,000 new jobless claims filed. Continuing jobless claims were also lower with 3.66 million ongoing claims filed; 3.70 million continuing jobless claims were filed in the prior week. The University of Michigan’s Consumer Sentiment Index reading was lower in May with a reading of  82.8 as compared to the expected reading of  90.1 and April’s index reading of 88.3.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing markets, data on sales of previously-owned homes,  and Commerce Department readings on housing starts and building permits issued. Minutes of the Fed’s most recent Federal Open Market Committee meeting will be released along with weekly readings on mortgage rates and jobless claims

What’s Ahead For Mortgage Rates This Week – March 15, 2021

What's Ahead For Mortgage Rates This Week - March 15, 2021Last week’s economic reporting included data on inflation and job openings, and weekly readings n mortgage rates, and jobless claims.

Inflation Rate Rises in February

Consumer prices grew by 0.40 percent in February according to the federal government’s Consumer Price Index; the year-over-year inflation rate rose from January’s reading of 1.40 percent to 1.70 percent. Consumer prices rose at their fastest pace in six months as rising fuel prices caused the jump in consumer prices. The Core Consumer Price Index, which does not include volatile food and fuel sectors, rose by 0.10 percent in February and matched analysts’ expectations.

Analysts expect continued economic expansion as Americans receive stimulus checks, get covid-19 vaccinations, and businesses reopen.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 3.05 percent. Interest rates for 15-year fixed-rate mortgages averaged 2.38 percent and rose by four basis points. Rates for 5/1 adjustable rate mortgages also rose by four basis points to 2.77 percent on average.

Jobless claims fell to their lowest level since November. New jobless claims fell to 712,000 claims filed as compared to the prior week’s reading of 754,000 initial claims filed in the prior week. Analysts expected 725,000 first-time claims to be filed. Last week’s reading showed the lowest pace of new jobless claims since November 7, when 211,000 first-time claims were filed.

Continuing jobless claims fell to 4.14 million claims filed as compared to the prior week’s reading of 4.34 million claims filed.  Jobless claims averaged fewer than two million claims filed before the pandemic. Accurate counts of individuals receiving jobless benefits were questioned due to the discovery of fraudulent claims and duplicate counting of some recipients. Analysts were advised to focus on jobless claims trends rather than individual claims data.  

What’s Ahead

This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts, and building permits issued. The Federal Reserve’s Federal Open Market Committee will release its post-meeting statement and Fed Chair Janet Yellen will give a press conference. Weekly readings on mortgage rates and jobless claims will also be released

What’s Ahead For Mortgage Rates This Week – January 19, 2021

What's Ahead For Mortgage Rates This Week - January 19, 2021Last week’s economic reports included readings on inflation, retail sales, and a speech by Federal Reserve Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims were also released.

 Inflation Rises as Retail Sales Fall, Fed  Says Current Monetary Policy Won’t Change

The Consumer Price Index rose to 0.40 percent in December as compared to November’s reading of 0.20 percent. The CPI measures inflation and the Core CPI measures inflation without the volatile sectors of food and fuel. December’s Core CPI reading fell to a rate of 0.10 percent growth from November’s reading of 0.20 percent.

Retail sales were dampened by the coronavirus, but December’s negative reading of -0.70 percent sales was lower than the    -1.40  percent rate reported in November.  December sales excluding the automotive sector were -1.40 percent lower in December as compared to November’s reading of -1.30 percent.

Federal Reserve Chair Jerome Powell dispelled fears of rising inflation and said that the Fed’s Federal Open Market Committee will not raise its current federal interest rate range of 0.00 to 0.25 percent any time soon. Chair Powell also said that the Fed would not decrease its purchase of Treasury Bonds as a further measure to stabilize the economy.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by 14 basis points to 2.79 percent. Rates for 15-year fixed-rate mortgages averaged 2.23 percent and were seven basis points higher. Rates for 5/1 adjustable rate mortgages rose by 37 basis points to 3.12 percent on average. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for  5/1 adjustable rate mortgages.

First-time jobless claims rose to 965,000 claims filed last week as compared to the prior week’s reading of 784,000 initial claims filed. Ongoing jobless claims also rose with 5.27 million claims filed as compared to the prior week’s reading of  5.07 million continuing claims filed.

The University of Michigan’s Consumer Sentiment Index was lower in January with a reading of 79.2.  Analysts expected an index reading of 79.2 based on the December reading of 80.7.

What’s Ahead

This week’s scheduled economic reports include the National Association of Home Builder’s Housing Market Index and reports from the Commerce Department on housing starts, building permits issued. Sales of pre-owned homes will also be reported along with weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – October 19, 2020

What's Ahead For Mortgage Rates This Week - October 19, 2020Last week’s economic reporting included readings on inflation, retail sales, and consumer sentiment. Weekly readings on average mortgage rates and jobless claims were also released.

Inflation Rate Slows as Retail Sales Increase

Inflation rose 0.20 percent in September, which was the slowest growth rate in four months. Analysts credited the rise in consumer prices to less post-pandemic price shock as consumers adjusted to higher prices for goods. Consumer prices were boosted by used vehicle prices, which increased at their highest pace in 51 years. Core consumer prices, which exclude volatile food and fuel sectors, also rose by 0.20 percent in September as compared to August’s reading of 0.40 percent.

The Commerce Department reported higher retail sales growth in September at a pace of 1.90 percent as compared to the expected reading of 1.20 percent and August’s reading of 0.60 percent growth in sales. Retail sales excluding the automotive sector grew by 1.50 percent in September and exceeded expected sales growth of 0.30 percent, and August’s retail sales growth of 0.50 percent.

Mortgage Rates Fall to New Record Low, Jobless Claims Data Mixed

Freddie Mac reported new record lows for average mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by six basis points to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.35 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages rose by one basis point to 2.90 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.50 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.

Last week’s jobless claims data showed mixed readings as initial jobless claims rose to 898,000 claims filed and surpassed the expected reading of 825,000 new claims filed and the prior week’s reading of 845,000 initial jobless claims filed.  10.02 million continuing jobless claims were filed last week as compared to 11.18 million ongoing claims filed in the prior week.

The University of Michigan’s Consumer Sentiment Index rose in October with an index reading of 81.2; this surpassed the expected reading of 79.9 and September’s reading of 80.4. October’s higher index readings suggest that consumers are adjusting to new economic realities caused by the pandemic and revising their expectations accordingly. The upcoming holiday season’s data for retail sales and consumer sentiment will provide additional indications of how Americans are coping with and recovering from the COVID-19 pandemic.

What’s Ahead

This week’s scheduled economic reports include readings from the NAHB on U.S. housing markets Commerce Department readings on housing starts and building permits issued. Data on sales of previously-owned homes will be released along with weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – August 17, 2020

 

Last week’s scheduled economic news included readings on inflation and retail sales. Weekly reports on mortgage
rates and new and continuing jobless claims were also released. In other news, the FHFA announced an increase in
fees charged by Fannie Mae and Freddie Mac for home loan refinance transactions.
Inflation Readings Mixed as Retail Sales Fall
Consumer prices rose by 0.60 percent in July and matched June’s reading. Analysts expected a July reading of 0.40
percent growth. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose by 0.60
percent in July and exceeded June’s reading of 0.20 percent and July’s expected reading of 0.20 percent price
growth.
Retail sales dropped to 1,20 percent growth in July as compared to June’s reading of 8.40 percent growth. July’s
retail sales reading fell short of the expected rate of 2.00 percent. Retail sales excluding the automotive sector rose
by 1.90 percent in July as compared to June’s retail sales growth rate of 8.30 percent Declining retail sales were
likely caused by a resurgence in Covid-19 cases in some areas.
State and local guidance on retail re-openings varied and likely impacted retail sales according to how Covid-19
regulations were interpreted and enforced. The federal government failed to enact a second round of stimulus
payments that would have provided Americans with extra cash for purchasing retail goods and services.
Mortgage Rates Rise as Jobless Claims Fall
Freddie Mac reported higher average mortgage rates last week; rates for 30-year fixed-rate mortgages rose by eight
basis points to 2.96 percent on average. Rates for 15-year fixed-rate mortgages rose by two basis points to 2.46
percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.90 percent. Discount points averaged
0.80 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
First-time jobless claims fell to 963,000 claims as compared to the prior week’s reading of 1.19 million new claims
filed and expectations of 1.08 million initial claims filed Continuing jobless claims were also lower than for the
previous week. 15.50 million ongoing jobless claims were filed last week as compared to 16.10 million claims filed
during the prior week. Falling jobless claims numbers could reflect the re-openings of business and rehiring of
employees. This progress could be short-lived as Covid-19 cases increased last week in some states where re-
opening may have been done too soon.
What’s Ahead
This week’s scheduled economic news includes readings from the National Association of Home Builders on
housing market trends, and Commerce Department reports on housing starts and building permits issued. Weekly
reports on mortgage rates and jobless claims will also be released.

What's Ahead For Mortgage Rates This Week - August 17, 2020Last week’s scheduled economic news included readings on inflation and retail sales. Weekly reports on  mortgage rates and new and continuing jobless claims were also released. In other news, the FHFA announced an increase in fees charged by Fannie Mae and Freddie Mac for home loan refinance transactions.

 Inflation Readings Mixed as Retail Sales Fall

Consumer prices rose by 0.60 percent in July and matched June’s reading. Analysts expected a July reading of 0.40 percent growth. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose by 0.60 percent in July and exceeded June’s reading of 0.20 percent and July’s expected reading of 0.20 percent price growth. 

Retail sales dropped to 1,20 percent growth in July as compared to June’s reading of 8.40 percent growth. July’s retail sales reading fell short of the expected rate of 2.00 percent. Retail sales excluding the automotive sector rose by 1.90 percent in July as compared to June’s retail sales growth rate of 8.30 percent Declining retail sales were likely caused by a resurgence in Covid-19 cases in some areas.

State and local guidance on retail re-openings varied and likely impacted retail sales according to how Covid-19 regulations were interpreted and enforced. The federal government failed to enact a second round of stimulus payments that would have provided Americans with extra cash for purchasing retail goods and services.

 

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week; rates for 30-year fixed-rate mortgages rose by eight basis points to 2.96 percent on average. Rates for 15-year fixed-rate mortgages rose by two basis points to 2.46 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.90 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 963,000 claims as compared to the prior week’s reading of 1.19 million new claims filed and expectations of 1.08 million initial claims filed Continuing jobless claims were also lower than for the previous week. 15.50 million ongoing jobless claims were filed last week as compared to 16.10 million claims filed during the prior week. Falling jobless claims numbers could reflect the re-openings of business and rehiring of employees. This progress could be short-lived as Covid-19 cases increased last week in some states where re-opening may have been done too soon.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market trends, and Commerce Department reports on housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims will also be released.