![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
MARKET COMMENT
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates were volatile Tuesday in response to a higher than expected core inflation reading. Producer prices rose 0.4% and the core value, which excludes the volatile food and energy components, rose 0.3%. Economists expected PPI to rise 0.4% and the core value to rise 0.2%. Tame consumer inflation readings Wednesday tempered some of the earlier losses. CPI rose 0.4% as expected. However, the core rose 0.1% versus the expected 0.2% increase. The Fed raised rates 25 basis points as expected. This was already factored into trading and didn’t move things much. Retails sales shocked on the upside with a 0.8% increase versus an expected 0.3% increase. Weekly jobless claims were 225K. Analysts looked for a mark of 235K. We ended the week worse by approximately 1/8 to 1/4 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| NAHB Housing Index | Monday, Dec. 18, 10:00 am, et |
70 | Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Tuesday, Dec. 19, 8:30 am, et |
1.3M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Q3 GDP Revised | Thursday, Dec. 21, 8:30 am, et |
Up 3.3% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Philadelphia Fed Survey | Thursday, Dec. 21, 10:00 am, et |
23 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Dec. 21, 8:30 am, et |
225K | Important. An indication of employment. Higher claims may result in lower rates. |
| Personal Income and Outlays | Friday, Dec. 22, 8:30 am, et |
Up 0.3%, Up 0.2% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, Dec. 22, 8:30 am, et |
Up 0.1% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Durable Goods Orders | Friday, Dec. 22, 8:30 am, et |
Up 0.4% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| New Home Sales | Friday, Dec. 22, 10:00 am, et |
685K | Important. An indication of economic strength and credit demand.Weakness may lead to lower rates. |
INCOME AND OUTLAYS
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
