Rates Improve Slightly on Mixed Economic Data

Mortgage interest rates improved slightly on the week on mixed economic data. Economic data stronger than expected included the August Consumer Confidence Index, August ADP Private Jobs, the second look at Q2 GDP, Jobless Claims, the August Chicago Purchasing Managers Index, and the August ISM Manufacturing Index. The ISM Manufacturing Index reached its highest level since July 2011. Economic data weaker than expected included the July U.S. Trade Deficit, July Personal Spending, July Pending Home Sales, the August Unemployment Rate, August Non-Farm and Private Jobs, August Hourly Earnings, July Construction Spending, and the University of Michigan Consumer Sentiment Index. The Treasury auctioned $88 billion of 2 Year Notes, 5 Year Notes, and 7 Year Notes which were met with reasonably strong demand. When Congress reconvenes it will need to address the debt ceiling to avert a government shutdown. Tax cuts will likely be discussed as well. North Korea fired a missile over Japan increasing geopolitical tensions and moving some money into the relative safety of Treasuries.

The Dow Jones Industrial Average is currently at 21,992, up almost 200 points on the week. The crude oil spot price is currently at $47.04 per barrel, down almost $1 per barrel on the week. The Dollar strengthened versus the Euro and Yen on the week.

Next week look toward Tuesday’s Factory Orders, Wednesday’s International Trade and ISM Services Sector Index, Thursday’s Jobless Claims and Productivity and Costs, and Friday’s Wholesale Trade as potential market moving events.