![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged which held rates steady. We improved early in the week despite solid data. Durable goods rose 9.9% vs 5%. The Fed rate cut sentiment overshadowed the release. The rest of the data was mixed, and prices fell the latter portion of the week. FHFA housing fell 0.1% vs the expected 0.2% increase. Consumer confidence was 103.3 vs 100.7. GDP rose 3% vs 2.8%. Weekly jobless claims were 231K vs 232K. Personal Income rose 0.3% vs 0.2%. Spending rose 0.5% as expected. Core PCE inflation rose 0.2% as expected. Consumer sentiment was 67.9 vs 68. Mortgage interest rates finished the week with discount points near unchanged for a second week in a row.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| ISM Index | Tuesday, Sept. 3, 10:00 am, et | 47.8 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Construction Spending | Tuesday, Sept. 3, 10:00 am, et | Down 0.3% | Low importance. An indication of economic strength. Significant weakness may lead to lower rates. |
| Trade Data | Wednesday, Sept. 4, 8:30 am, et | $74B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Factory Orders | Wednesday, Sept. 4, 10:00 am, et | Down 0.2% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Fed “Beige Book” | Wednesday, Sept. 4, 2:00 pm, et | None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. |
| ADP Employment | Thursday, Sept. 5, 8:15 am, et | 150K | Important. An indication of employment. Weakness may bring lower rates. |
| Weekly Jobless Claims | Thursday, Sept. 5, 8:30 am, et | 230K | Important. An indication of employment. Higher claims may result in lower rates. |
| Employment | Friday, Sept. 6, 8:30 am, et | 4.2%, Payrolls +163K | Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
ADP Employment
The ADP employment report is a measure of employment derived from data of roughly 500,000 US businesses. The survey focuses on the private sector of the economy. In contrast, the Bureau of Labor Statistics releases the regular employment report which includes both private and government employment statistics.
The Fed is usually focused on inflation. Tightening employment conditions can result in wage inflation. The ADP report provides solid data on these conditions. Despite this, the data can still diverge from the regular employment report. The employment report is derived from a household survey and an establishment survey These surveys often differ from one another and from the ADP employment report in that they are based on different data sets. There are no guarantees that the most important employment report the first Friday of each month will mirror the ADP report released 2 days prior but the Fed looks at all the data.
Be cautious heading into economic releases. Short-term volatility usually follows.
