Comments by Fed chairman Ben Bernanke after Wednesday's FOMC meeting caused havoc in financial markets as investors anticipated the potential effects of any rollback of the Fed's policy of quantitative easing (QE). Chairman Bernanke said that the Fed may begin reducing its $85 billion monthly purchase of Treasury securities and MBS toward the end of this year.
Last week government agencies finally issued reports that were delayed by the government shutdown including the big jobs report. The Bureau of Labor Statistics issued the Nonfarm Payrolls report for September last Tuesday instead of its normal schedule release on the first Friday of each month. September’s reading indicated that only 148,000 jobs were created as compared to economists’ expectations of 185,000 jobs and August’s reading of 173,000 new jobs. This report helped lower rates as employment is a key factor in determining not only the health of the economy, but also future policy of the Federal Reserve.
Weekly Jobless claims were higher than expected at 350,000 new claims; analysts had expected 337,000 new claims. The latest reading was below the prior reading of 362,000 new jobless claims.
The University of Michigan’s Consumer Sentiment Index was released Friday with some telling results. October’s reading 73.2 from September’s revised reading of 77.5. A reading of 74.8 had been expected based on September’s original reading of 75.2. Consumers interviewed for the October CSI indicated that the federal government was the major factor in lower confidence in the economy.
What Will Impact Mortgage Rates This Week?
We have a huge amount of economic data that are scheduled to be released this week due to a number of reports hitting that were postponed due to the government shutdown.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|28-Oct||9:15 AM||Industrial Production||–||0.30%||0.40%|
|28-Oct||9:15 AM||Capacity Utilization||–||78.00%||77.80%|
|28-Oct||10:00 AM||Pending Home Sales||–||-1.30%||-1.60%|
|29-Oct||8:30 AM||Retail Sales||–||-0.10%||0.20%|
|29-Oct||8:30 AM||Retail Sales ex-auto||–||0.30%||0.10%|
|29-Oct||9:00 AM||Case-Shiller 20-city Index||–||12.40%||12.00%|
|29-Oct||10:00 AM||Business Inventories||–||0.20%||0.40%|
|29-Oct||10:00 AM||Consumer Confidence||–||73.1||79.7|
|30-Oct||7:00 AM||MBA Mortgage Index||–||NA||-0.60%|
|30-Oct||8:15 AM||ADP Employment Change||–||125K||166K|
|30-Oct||8:30 AM||Core CPI||–||0.10%||0.10%|
|30-Oct||10:30 AM||Crude Inventories||–||NA||5.246M|
|30-Oct||2:15 PM||FOMC Rate Decision||–||0.25%||0.25%|
|31-Oct||7:30 AM||Challenger Job Cuts||–||NA||19.10%|
|31-Oct||8:30 AM||Initial Claims||–||335K||350K|
|31-Oct||8:30 AM||Continuing Claims||–||2850K||2874K|
|31-Oct||9:45 AM||Chicago PMI||–||55||55.7|
|31-Oct||10:30 AM||Natural Gas Inventories||–||NA||87 bcf|
|1-Nov||10:00 AM||ISM Index||–||55||56.2|
|1-Nov||10:00 AM||Construction Spending||–||NA||NA|
|1-Nov||2:00 PM||Auto Sales||–||NA||5.4M|
|1-Nov||2:00 PM||Truck Sales||–||NA||6.5M|