Weekly Economic Review: August Retail Sales Fall Short, Mortgage Rates Climb

Posted by Laine Smith on 9/16/16 10:57 AM

Topics: Economy

Surmounting indications of a Federal Reserve rate increase continue to top economic news. This week, the average 30-year fixed-rate mortgage increased to a post-Brexit high, according to Freddie Mac.

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Image courtesy of hywards at FreeDigitalPhotos.net

After a strong second quarter, August’s Retail Sales report did not meet the consensus mark following gains in July (a revised plus 0.1 percent). Month-to-month, August retail sales were down 0.3 percent (-0.1 percent excluding autos). The strength of consumer demand is a factor considered by Federal Reserve officials.

The August Consumer Price Index increased more than expected, up 0.2 percent from July and up 1.1 percent year-over-year. Core CPI jumped 0.3 percent, which is the largest increase in 5 months. Increases in rent, medical care, motor vehicle insurance, apparel and communication offset declining prices of used vehicles, household furnishings, recreation and airline fares.

This week in the economy:

  • The purchase application index of MBA Mortgage Applications jumped 4.2 percent in the September 9 week, up 8 percent year-over-year. The refinance sector also increased by a respectable 2 percent.
  • Initial Jobless Claims increased by 1,000 in the September 10 week to 260,000, pulling the 4-week average down to 260,750.
  • The Bloomberg Consumer Comfort Index fell to 42.2 from last week’s reading of 44.

What’s on economic calendar for the week of September 19, 2016:

  • Monday Housing Market Index
  • Tuesday – Housing Starts, FOMC Meeting Begins
  • Wednesday – MBA Mortgage Applications, FOMC Meeting Announcement
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, FHFA House Price Index, Existing Home Sales

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