![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged despite significant up and down movements. We started on a positive note and continued that way through most of the week. Unfortunately, strong employment readings Friday erased the improvements. The data was mixed. ISM Index came in at 46.3 vs 47.5. Factory orders fell 0.7% vs the expected 0.5% decline. ADP employment came in at 145K vs 200K. Weekly jobless claims were 228K vs 203K. Unemployment came in at 3.5% vs 3.6%. Payrolls were +236K vs +239K. Average hourly earnings rose 0.3% as expected. Mortgage interest rates finished the week with discount points near unchanged.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Consumer Price Index | Wednesday, April 12, 8:30 am, et |
Up 0.3%, Core up 0.4% |
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
| Producer Price Index | Thursday, April 13, 8:30 am, et |
Up 0.2%, Core up 0.3% |
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
| Weekly Jobless Claims | Thursday, April 13, 8:30 am, et |
205K | Important. An indication of employment. Higher claims may result in lower rates. |
| Retail Sales | Friday, April 14, 8:30 am, et |
Down 0.4% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
| Industrial Production | Friday, April 14, 9:15 am, et |
Up 0.2% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
| Capacity Utilization | Friday, April 14, 9:15 am, et |
79.1% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, April 14, 10:00 am, et |
62.7 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Retail Sales
Retail sales data is the first indication of weakness or strength in consumer spending released each month. The Bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods. This data provides the consumption part of the gross domestic product. Retail sales data represents merchandise sold for cash or credit by retailers. Durable goods, such as autos, make up 35% of the figure. The balance consists of non-durables such as gasoline, restaurants, and general merchandise. There are several drawbacks to the report. The data covers purchases of goods only, not services. It is also not adjusted for inflation and is extremely volatile. Economists are concerned that the current economic uncertainty, higher interestrates, and recessionary fears will curtail consumer spending.
The data this week will provide a good picture of how higher prices are impacting consumer purchases. A cautious approach to floating into data releases is prudent considering the recent volatility. Signs that the rate cuts are working could help rates improve. However, signs that inflation remains high and consumer spending remains strong could push rates higher.
