Economic News
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Kenton Becker
Loan Officer
Office: (206) 423-2552

NMLS #123961 ,
Washington #MLO-123961

Events Last Week:

GDP Increased
Income Rose
Confidence Fell
Manufacturing Up

Events This Week:

Mon 8/5
ISM Services

Tues 8/6
Trade Balance
3-yr Auction

Wed 8/7
10-yr Auction

Thur 8/7
Jobless Claims
30-yr Auction




landhome landhome

Economic Data is Mixed

Last week was packed with major economic reports and a Fed meeting. With investors looking for hints about when the Fed will begin to taper its bond purchases, the data caused a great deal of volatility. Because the economic news was roughly neutral overall, though, mortgage rates ended the week just slightly higher.

The economic data released on Wednesday, Thursday, and Friday caused large swings in mortgage rates. Positive news on economic growth was bad for mortgage rates and vice versa. Second quarter GDP increased 1.7%, above the consensus of 1.1%, and mortgage rates jumped. Then, ISM Manufacturing unexpectedly increased to the highest level since June 2011, pushing mortgage rates even higher. When Friday's highly anticipated Employment data was a little weaker than expected, though, mortgage rates reversed nearly the entire increase seen earlier in the week.

The reaction to these reports was exaggerated. A big reason for the volatility is that the Fed has indicated that future policy changes will depend on the performance of the economy. Investors had hoped that the Fed would provide more concrete guidance this week on its plans to begin to taper, but Wednesday's Fed statement provided no additional clarity. The consensus view is still that the Fed will begin to scale back its bond purchases in September, unless economic growth weakens significantly. As long as a high level of uncertainty remains about when the Fed will taper, volatility is likely to stay elevated.

Also Notable:
  • The Unemployment Rate fell to the lowest level since December 2008
  • Core PCE inflation was just 1.2% higher than one year ago
  • Pending Home Sales were 11% higher than one year ago
  • The European Central Bank (ECB) made no change in rates


Average 30 yr fixed rate:
Last week: +0.03%
This week: +0.03%
Stocks (weekly):
Dow: 15,575 +150
NASDAQ: 3,675 +75

This Week

This week will be a light one for economic events. ISM Services will be released on Monday. The Trade Balance will come out on Tuesday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. Speeches from Fed officials also will receive attention from investors next week.

©2013 MBSQuoteline

Equal Housing Opportunity Lender. Rates, Program, Fees, and Guidelines are subject to change without notice. Not a commitment to lend. Land Home only conducts business in states we are approved to. Land Home Financial Services, 22525 SE 64th Place, Suite 220, Issaquah, WA 98027. Washington Consumer Loan License #CL-89331. NMLS ID # 89331. Kenton Becker Licenses: NMLS #123961; Washington #MLO-123961. You are receiving this communication because of an existing and/or past business relationship, or because you have consented to receive communications from Land Home. 08-05-13  
301 116th Ave SE Suite 200, Bellevue, Washington, 98004
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