In this week’s economic review, retail sales picked up steam, builders are feeling optimistic about the housing market, and mortgage rates saw little change over the past week.
Consumerism was up sizably in July, according to the July retail sales report. The index was up 0.6 percent from June, which also posted a sizable revision to plus 0.3 percent versus an initial report of minus 0.2 percent. Non-store retailers, vehicle dealers and building material sellers led the report, but sales minus autos was still up 0.5 percent.
Housing Market Index
Builders are expecting gains for both present sales, up 4 points, and 6-month sales, up 5 points. On the negative side of the report, buyer traffic remains low at a level of 49.
July housing starts couldn’t hold June’s 1.2 million annualized rate, failing to meet low-end consensus levels at 1.155 million. Permits also decreased to 1.223 million from June’s 1.275 million.
Multi-family units are the main reason for July’s decreases. After rising in early 2017, multi-family starts fell over 50,000 from June to July and are down 34 percent from July 2016. Single-family data remains steady with starts posting an 11 percent gain from 2016.
The Federal Reserve
Minutes from the last Fed meeting in July show that the group of policymakers are split on the outlook of future rate hikes. While some are concerned over the recent decline in inflation, the meeting notes state that they would evaluate future reports to determine the “likelihood that recent low readings on inflation were transitory.”
According to the preliminary consumer sentiment for August, the index climbed over 4 points, landing at 97.6. The preliminary August level is well over high-end estimates and the highest reading since January 2017, but the report is expected to be downsized.
This week in the economy:
- The average 30-year fixed-rate fell 1 basis point as of August 17, landing at 3.89% with 0.5 points, according to Freddie Mac.
- Purchase applications fell a seasonally adjusted 2 percent in the week of August 11 while refinance activity increased by 2 percent, according to MBA Mortgage Applications.
- Initial jobless decreased substantially in the week of August 12, according to Bloomberg. Initial claims dropped by 12,000 to 232,000. The 4-week average is now down 3,500 in comparison to a month ago.
- The Bloomberg Consumer Comfort Index edged lower the week of August 13, falling just 0.2 points to a level of 51.2.
The economic calendar for the week of August 21st, 2017:
- Tuesday – FHFA House Price Index
- Wednesday – MBA Mortgage Applications, New Home Sales
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Existing Home Sales
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