Weekly Economic Update - 7.2.18
I hope you had a great weekend.
RATE MOVEMENT (from prior week) – NO CHANGE
There were few surprises in the data released last week or in the other economic news. It was a quiet week, and mortgage rates ended unchanged.
IMPORTANT ECONOMIC FACTORS:
The Fed & Inflation - One reason that the Fed has been raising the federal funds rate is that inflation has moved higher in recent months. The Fed’s favored inflation indicator is the core PCE price index. After holding steady at levels close to 1.5% for nearly a year, core PCE has jumped over the last three months. Friday’s release showed that core PCE in May was 2.0% higher than a year ago, the largest annual rate of increase since April 2012.
Home Sales – Recently released data revealed that the disparity between sales of previously owned homes and new homes continued in May. While contracts signed to purchase previously owned homes fell a little from April and were lower than a year ago, contracts signed to purchase new homes jumped 5% from April and were 14% higher than a year ago. A shortage of inventory of previously owned homes in many regions is clearly holding back sales (which we are all feeling in Maricopa County).
Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month (and CAN be a rate mover). The minutes from the June 13th Fed meeting also will come out on Thursday. Mortgage markets will close early on Tuesday and will be closed on Wednesday for the holiday.
Please let me know if you have any questions in regards to this.
Thank you for your continued support, have a fun and safe 4th of July!
SVP, Regional Manager
THE CRAWFORD TEAM
V.I.P Mortgage, Inc.