MBA Purchase Applications – Purchase applications were down 9.1% for the two-week period covering the holiday. Purchase applications fell 5.0%, while refinances were down 12.0%. Low mortgage rates were not enough to make up for the holiday slow down.
International Trade – The U.S. trade deficit shrunk from $42.2 billion to $39.0 billion, beating market expectations. Although exports were down 1.0%, imports were down 2.2%, largely due to falling oil prices. The drawing goods gap was down this month to $11.4 billion from $15.2 billion.
Jobless Claims – Initial jobless claims fell 4,000 this week to 294,000. This brought the four-week average down to 290,500. Continuing claims for the week of December 27 rose by 101,000, bringing the number to 2.452 million. Despite this, the four-week average fell to 2.397 million.
Employment Situation – Payroll jobs were up 252,000 this month. The unemployment rate decreased to 5.6%. Meanwhile, average hourly earnings fell by 0.2% in December. Other notable increases came in construction jobs, which jumped by 67,000. There was a 17,000-job jump in manufacturing.
Mortgage rates fell across the board this week.
30-year fixed-rate mortgages (FRMs) averaged 3.73% with an average 0.6 point for the week ending January 8, 2014, down from last week when they averaged 3.87%. A year ago at this time, 30-year FRMs averaged 4.51%.
15-year FRMs this week averaged 3.05% with an average 0.5 point, down from last week when they averaged 3.15%. A year ago at this time, 15-year FRMs averaged 3.56%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.98% this week with an average 0.5 point, down from last week when they averaged 3.01%. A year ago, the 5-year ARMs averaged 3.15%.
1-year Treasury-indexed ARMs averaged 2.39% this week with an average 0.4 point, down from last week when they averaged 2.40%. At this time last year, the 1-year ARMs averaged 2.56%.
The markets ended the week in the red for the young year after experiencing drops late in the week that analysts blamed on the events in Paris. The Dow Jones Industrial Average closed Friday at 17,737.37, down 0.5% for the week. The S&P 500 finished the week down 0.7%, closing at 2,044.81. The NASDAQ was down 0.9%, closing Friday at 4,704.07.
The Week Ahead
Wednesday, January 14
MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are by retail and food services stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Bureau of the Census.
Thursday, January 15
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims helps smooth out weekly volatility.
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in the prices received by domestic producers of goods and services.
Friday, January 16
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time.
Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining and electric and gas utilities.
Consumer Sentiment (9:55 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
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