I had an appointment on Friday, so I took a three-day weekend. They’re never long enough. I hope you rested up yourself, because we’ve got some important data to go over for both manufacturing and employment. Let’s dig in.
Pending Home Sales Index: The number of homes with a purchase agreement in place was up 1.5% in June, bringing this index to 110.2. The West was the strongest region with the Midwest in the rear, but there was little separating the regions. They were all fairly strong.
Personal Income and Outlays: Personal incomes were flat in June, while consumer spending rose just 0.1%. Overall prices didn’t move and were up just 0.1% in core categories. On an annual basis, prices are up 1.4% and 1.5% in core categories. Wages and salaries were up 0.4%. However, business owners saw their income fall. There was a 0.3% gain in pricing for services that was offset by a 0.4% downturn in both durable and nondurable goods.
ISM Manufacturing Index: Reports were strong for manufacturing in July, despite growth being slightly slower in comparison to June. The report came in at 56.3, down 1.5 points overall. New orders are very strong at 60.4, while backlog orders continue to grow at 55.0. Production is at 60.6. Input costs also went up seven points to 62.0.
MBA Mortgage Applications: The average rate on a 30-year fixed conforming mortgage was flat at 4.17% and it didn’t cause any urgency in the minds of mortgage applicants. Overall applications were down 2.8% on the week with purchase applications falling 2.0% and applications to refinance down 4.0%.
Jobless Claims: Initial claims were down 5,000 last week coming in at 240,000. The four-week average fell a bit as well, down 2,500 at 241,750. Continuing claims were down 3,000 to 1.968 million. Meanwhile, the four-week average was at about 1.965 million after increasing by just 750 claims last week.
Employment Situation: The number of jobs added to nonfarm payrolls in July beat expectations by better than 30,000 to come in at 209,000. The unemployment rate was 4.3%, down 0.1%. Private payrolls added 205,000 jobs, with the remainder being new government jobs. Manufacturing payrolls added 16,000 jobs, easily beating expectations. In another good sign, the labor force participation rate went up 0.1% to 62.9%. Average hourly earnings were up 0.3% on the month and have risen 2.5% on the year. The length of the average workweek remained at 34 hours, 30 minutes. In addition to strong gains in manufacturing, professional and business services were up 49,000, including a 15,000 job gain for temporary payrolls. Revisions of previous reports were mixed, coming in 9,000 higher in June and 7,000 lower in May.
International Trade: The U.S. trade deficit fell by $2.8 billion to $43.6 billion in the month of June. This should be a positive for future readings of second-quarter GDP. The goods gap was down 3.2% to $65.3 billion, while the nation’s services surplus was up 2.9% to $21.6 billion. Exports were up with a little help from cars offsetting a decline in exports of consumer goods. Imports of crude oil and industrial supplies were down as rumored consumer goods imports. Capital goods imports were flat. This meant imports fell overall despite a steep uptick in auto imports.
Mortgage rates were mixed last week, holding pretty close to where they’ve been the last few weeks. It remains a great time to lock your rate if you’re in the market.
First, 30-year fixed-rate mortgages (FRMs) averaged 3.93% with an average 0.5 point for the week ending August 3, 2017, up from last week when they averaged 3.92%. A year ago at this time, 30-year FRMs averaged 3.43%.
In shorter terms, 15-year FRMs this week averaged 3.18% with an average 0.5 point, down from last week when they averaged 3.20%. A year ago at this time, 15-year FRMs averaged 2.74%.
Finally, 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.15% this week with an average 0.5 point, down from last week when they averaged 3.18%. A year ago at this time, 5-year ARMs averaged 2.73%.
The jobs report came in better than expected, and the stock market got a lift on Friday as the Dow Jones industrial average posted its eighth straight record day.
The Dow closed up 66.71 points at 22,092.81. This was a weekly gain of 1.20%. The S&P 500 finished the week at 2,476.83, up 4.67 points and 0.19% for the week. It was earnings week for a lot of tech firms The Nasdaq ended the week down 0.36% despite being up 11.22 points Friday to close at 6,351.56.
The Week Ahead
Tuesday, August 8
Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month comparing what people think their homes are worth through appraisals. Similar opinions of value often make for smoother purchase and refinance transactions.
Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, both on the national and regional level. Homeowners can gain a perception of whether values are increasing or decreasing and get a better idea of where they stand in terms of equity.
Wednesday, August 9
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, August 10
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers for the sale of goods and services.
Friday, August 11
Consumer Price Index (CPI) (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.
We get some home data midweek and inflation data to close it out. We’ll keep an eye on it all and have it for you next week.
If this mortgage and economic data dump isn’t for you, we have plenty of home, money and lifestyle content we can’t wait to share with you if you subscribe to the Zing Blog below. Tomorrow is another one of those awesome internet-invented holidays, International Cat Day. The closest thing I had to cats growing up were Garfield and Sylvester in the cartoons. I love my little silky terrier, Tyson, but he certainly has a lot of stuff. Whatever your pet of choice is, here are some awesome ways to disguise their pet supplies as home decor. Have a great week!
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