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I’m a little more excited to get started this morning than I normally would be on a Monday. We have a team holiday party tonight. I hope your holiday season has been going well so far!

It was a good week in the markets that included a pretty good jobs report. Let’s dive right into the data.

Headline News

International Trade

The U.S. trade deficit widened by $3.8 billion to $48.7 billion in October.

On the export side, things were flat at $195.9 billion. Capital goods exports were down $1.2 billion to $43.9 billion. This wasn’t helped by a $1.1 billion drop in the number of aircraft exports. Exports of vehicles were down at $12.6 billion, as were exports of consumer goods, at $16.3 billion.

On the import ledger, imports are up 1.6% to $244.6 billion. Part of the reasoning for this was that oil was up $2 to $47.26 per barrel. This caused industrial supply costs to rise $1.5 billion to $10.7 billion. Consumer goods imports were also up $800 million to $50.0 billion.

MBA Mortgage Applications

Overall applications rose 4.7% last week. Refinances were up 9.0%, and purchase applications were up 2.0% on the week.

The average rate on a 30-year fixed conforming mortgage was down one basis point to 4.19% in this data.

Jobless Claims

Despite claims rising unexpectedly by more than 4,000 in Puerto Rico, overall claims fell 2,000 to 236,000 last week. The four-week average was down 750 to 241,500 claims.

Continuing claims fell last week by 52,000 to 1.908 million. The four-week average was up 1,000 to about 1.913 million.

Employment Situation

There were 228,000 jobs added to the economy in November, coming in 38,000 above estimates. The unemployment rate was flat at a very low 4.1%.

The downside to this report was that wages seem to be going up fairly slowly after having dropped in the October report. They were up just 0.2% and have risen 2.5% on the year. Employees did work an extra six minutes this month, coming in at 34 hours, 30 minutes. The labor force participation rate remained at 62.7%.

Looking at individual sectors, 221,000 jobs were added to private payrolls. Of those, 31,000 were added in manufacturing. There were 24,000 jobs added in construction and 46,000 added in professional services.

Consumer Sentiment

Consumer sentiment fell 1.7 points to 96.8 in preliminary readings for December.

The good news here is current conditions were up 2.9 points to 115.9, a high not seen in 17 years. Income expectations are rising, and there’s a strong job market. Because inflation expectations have remained low, it’s clear that people expect their incomes to go further. With that said, one-year expectations for inflation were up 0.3% to 2.8%. Expectations of the next five years were up 0.1% to 2.5%.

Expectations for the future fell 4.3 points to 84.6. Many analysts blamed this on those who identify as Democrats being concerned about tax changes.

Mortgage Rates

Mortgage rates were up last week ahead of this week’s Federal Reserve meeting, where short-term interest rates are expected to rise. If you’re in the market for a mortgage, rates remain low and it’s a great time to lock your rate.

First, 30-year fixed-rate mortgages saw rates rise four basis points to 3.94% with 0.5 prepaid interest points in fees. At the same time last year, rates were 3.75% on a 30-year term

Looking at shorter terms, the average interest rate for a 15-year mortgage was up six basis points to 3.36% with 0.5 points. This matches the rate from a year ago.

On the adjustable rate mortgage (ARM) side, the 5-year treasury-indexed hybrid ARM was up three basis points to 3.35% with 0.3 points.

Stock Market

On the strength of the jobs report, the Dow Jones industrial average and S&P 500 both had record closings.

The Dow was up 117.68 points on the day to close at 24,329.16, up 0.40% on the week. The S&P 500 finished at 2,651.50, which is up 0.35% on the week and 14.52 points on the day. The Nasdaq was the only index down for the week, falling 0.11%. Still, it was up 27.24 points Friday to close at 6,840.08.

The Week Ahead

Tuesday, December 12

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.

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 to 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, on both the national and regional levels. 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, December 13

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

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.

Thursday, December 14

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to report 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.

Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.

Friday, December 15

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 – covers manufacturing, mining, and electric and gas utilities.

There are a few big reports coming next week, including production and sales data, along with inflation numbers. This is on top of a Federal Reserve interest rate announcement. The Fed is expected to raise short-term rates this week. If you’re in the market right now, it’s a great time to lock before mortgage rates rise. No matter what happens, we’ll have it covered for you next week.

If mortgage rates and economic news aren’t helping with your case of holiday brain, we get it. We have plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. As you get ready for your parties, here are nine great holiday drink swaps. Have a great week!

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