In this week’s economic review, mortgage rates went down, consumer prices continue to signal weak inflation, and job openings increased sharply while hiring fell.
Consumer Price Index
Consumer prices didn’t rise to expectations in July and remain very soft overall. Total prices inched 0.1 percent higher in the month as did the core price index (minus food and energy). Year-over-year comparisons also remained soft with low estimates at 1.7 percent for both core and total indexes.
Energy prices dropped 0.1 percent but the decline was offset by the 0.2 percent rise in food prices.
Job openings increased sharply in June, according to Tuesday’s JOLTS report. Openings increased to 6.163 million in June from 5.702 million May, while hiring fell sharply to 5.356 million from 5.458 million. May’s report signaled that hirings were picking up and helping to close the gap, but JOLTS data can be volatile on a month-to-month basis.
According to Gallup’s US Consumer Spending Measure, July marks the sixth month in a row that Americans have self-reported spending more than $100 a day. In July, the daily reported average was $109, the highest spending average since May 2008.
The headline consumer credit for June came in below expectations at $12.4 billion, but revolving credit grew at an annual rate of 4.9 percent to $1.0 trillion. Non-revolving credit has had less-than-expected increases with a 3.5% annual increase rate or $8.2 billion.
This week in the economy:
- The average 30-year fixed-rate fell 3 basis points as of August 10, landing at 3.90% with 0.5 points, according to Freddie Mac.
- Purchase applications increased a seasonally adjusted 1 percent in the week of August 4, while refinance applications increased 5 percent, according to MBA Mortgage Applications. The increase in refinance activity allowed the refinance sector to gain 1.2 points of the mortgage market, up to 46.7 percent. Purchase applications are up 7 percent from the same week a year ago.
- Initial jobless claims saw little change in the week of August 5, according to Bloomberg. Initial claims stood at 244,000 while the 4-week average fells slightly below the month-ago comparison.
- The Bloomberg Consumer Comfort Index posted a significant gain in the week of August 6 after softening for most of July. The index jumped nearly one point to a level of 51.4.
The economic calendar for the week of August 14th, 2017:
- Tuesday – Retail Sales
- Wednesday – MBA Mortgage Applications, Housing Starts, FOMC Minutes
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Consumer Sentiment
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