August 3rd, 2018 12:40 PM by Jonathan White
Mortgage Market News for the week ended August 03, 2018
President and CEO Mortgage Broker | NMLS ID: 3443
Blue Door Mortgage, LLC
Call: 617.527.BLUE (2583)
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While there was major economic data released this week and a Fed meeting, there were no significant surprises. Mortgage rates ended the week a little higher.
Friday's key Employment report came in pretty much right on target across the board. Against a consensus forecast of 190,000, the economy gained 157,000 jobs in July. However, upward revisions added 59,000 jobs to the results for prior months. The economy has gained an average of 215,000 jobs per month so far this year, exceeding even the strong pace of 184,000 seen over this period last year.
The unemployment rate decreased from 4.0% to 3.9%, matching expectations. Average hourly earnings, an indicator of wage growth, also matched expectations. They were 2.7% higher than a year ago, the same annual rate of increase as last month.
As expected, the Fed made no policy changes at Wednesday's meeting. The Fed's statement was very similar to the prior one from the June meeting. The most notable change in the statement was that Fed officials modestly upgraded their assessment of the pace of economic growth. In particular, the statement said that economic activity "has been rising at a strong rate," while the prior statement described it as "solid." In addition, Fed officials noted that household spending and business investment have "grown strongly." In June, they just said that it had "picked up." Investors expect that the Fed will raise the federal funds for the third time this year at the next meeting on September 26.
Looking ahead, the JOLTS report, which measures job openings and labor turnover rates, will be released on Wednesday. Fed officials value this data to help round out its view of the strength of the labor market. The Consumer Price Index (CPI) will come out on Friday. CPI is a widely followed monthly inflation report that looks at the price change for goods and services. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.
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