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Economic News
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Kenton Becker
Loan Officer
Office: (206) 423-2552
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NMLS #123961 ,
Washington #MLO-123961

Events Last Week:

Retail Sales Dropped
Sentiment Lower
Jobless Claims Fell
Manufacturing Mixed

Events This Week:

Tues 4/16
CPI
Housing Starts
Industrial Prod.

Wed 4/17
Beige Book

Thur 4/18
Philly Fed
Leading Indicators

 

 

 

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Inflation Remains Low

Following the previous week's large rally, it was a relatively quiet last week for mortgage rates. In the economic reports released last week, inflation remained low and the economic growth data was mixed. Mortgage rates ended the week with little change.

The economic report which received the most attention this week was Retail Sales, which represent roughly 70% of economic activity. March Retail Sales declined 0.4% from February, which was weaker than expected. Since the beginning of the year, investors have been concerned that consumers would scale back their spending due to the payroll tax increase, the sequester cuts, and higher gas prices. Combined with the weak March Employment report released last week, the question is how quickly the economy will grow for the rest of the year. Looking at the averages for the first three months of the year, Retail Sales growth and job gains were fairly strong even with the weakness in March.

The FOMC Minutes from the March 20 Fed meeting were released on Wednesday and contained a bit of a surprise. The minutes revealed that, due to improvement in the economic outlook, there was growing support for scaling back the Treasury and mortgage-backed securities (MBS) purchase program, beginning as soon as this summer. The impact of this news on mortgage rates was limited, however, since the Fed meeting took place before the weak March Employment and Retail Sales reports were released. The recent data reduced investor concerns about an earlier than expected end to the bond-buying program. The minutes were a reminder that the economic data in coming months will determine the timing of Fed policy changes, meaning that volatility around major economic reports likely will remain very high.

Also Notable:
  • Core PPI inflation was 1.7% higher than one year ago
  • Consumer Sentiment dropped to the lowest level since July
  • The Unemployment Rate in Greece rose to a record level of 27%
  • Gold dropped below $1,500 per ounce, to the lowest level since early 2012

graph

 
Average 30 yr fixed rate:
Last week: -0.15%
This week: +0.02%
Stocks (weekly):
Dow: 14,800 +300
NASDAQ: 3,275 +80
 

This Week

Tuesday will be the big day for economic data next week with CPI, Housing Starts, and Industrial Production. The Consumer Price Index (CPI), the most closely watched monthly inflation report, looks at the price change for those finished goods which are sold to consumers. The Fed's Beige Book will be released on Wednesday. Philly Fed will come out on Thursday. Empire State and Leading Indicators will round out the schedule.

©2013 MBSQuoteline

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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.  

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