The data is in and it looks like the Federal Reserve Board will likely lower rates again next week, as market analysts have predicted. There was plenty of data released in the past two weeks. First, we saw a revision of the estimate of the second quarter’s economic growth. While not final, the 2.0% growth rate is seen as evidence that the economy is slowing down.
This was followed by the release of personal income and spending statistics for July. The consumer has been propping up the economy with fairly robust spending during the first half of the year. The fact that personal spending increased by 0.6% in July tells us that this behavior is continuing even though spending is outpacing income growth. Finally, we had the employment report for August.
It is our low unemployment rate which is enabling consumer spending. The addition of 130,000 jobs in August is an indication that the boost we have seen from the creation of new jobs is waning. The report also included a revision of July’s report downward by 5,000 jobs. The overall unemployment rate remained at 3.7% and wage inflation was slightly higher than expected. Overall, the data shows that the economy is slowing, but not yet in danger of slipping into recession in the short-term.
Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media? Sign up for a free trial at www.OriginationPro.com.