Mixed Data – September 2019 Edition

There was little change in mortgage rates this week, as investors looked ahead to major central bank meetings later in the month. The economic data released this week contained mixed results, and its net effect was small.

A small miss in job gains in Friday’s key Employment report was offset by wage gains which modestly surpassed expectations. Against a consensus forecast of 150,000, the economy added just 130,000 jobs in August. In addition, downward revisions subtracted 20,000 jobs from the results for prior months. The Unemployment Rate remained at 3.7%, as expected. Average hourly earnings, an indicator of wage growth, rose 0.4% from July, above the consensus of 0.3%.

Earlier in the week, the major data again reflected solid performance in most of the economy, with the glaring exception of the manufacturing sector. The ISM national services index posted much larger than expected gains to 56.4, but the ISM national manufacturing index missed to the downside with a decline to 49.1. Readings above 50 indicate an expansion, while readings below 50 indicate a contraction. Global manufacturing activity has been slowed in recent months by increased trade barriers such as tariffs.

On the trade front, the latest news about the negotiations between the U.S. and China indicated a willingness on both sides to continue to work toward a mutually beneficial deal. On Thursday, officials announced that the next round of trade talks will take place early in October.

Looking ahead, the next European Central Bank (ECB) meeting will take place on Thursday. In the U.S., the Consumer Price Index (CPI) will come out on Thursday. CPI is a widely followed monthly inflation report that looks at the price change for goods and services. Retail Sales will be released on Friday. Since consumer spending accounts for about 70% of all economic activity in the U.S., the retail sales data is a key indicator of growth. The next U.S. Fed meeting will take place on September 18. In addition, news about the trade negotiations could influence mortgage rates.

Weekly Change
10yr Treasury rose 0.05
Dow rose 400
NASDAQ rose 75
Thu 9/12 CPI
Thu 9/12 ECB Meeting
Fri 9/13 Retail Sales

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