Mortgage bond prices finished the week lower which put upward pressure on rates. We started the week on a slightly positive note Monday, were flat most of the middle of the week but ended negatively. Stocks were a bit choppy with gains one day and losses the next. The data was very mixed. ISM Index was 57.5 vs 58. ADP employment was 307K vs the expected 380K. Weekly jobless claims were 712K vs 785K. The Fed kept things relatively calm until Thursday and Friday. The headline unemployment figure resulted in some selling pressure. Unemployment was 6.7% vs the expected 6.9%. Non-farm payrolls rose 245K vs the expected 550K. Mortgage interest rates finished the week worse by 1/8 to 1/4 of a discount point.
LOOKING AHEAD
| Release Date & Time | Consensus Estimate | Analysis | |
| Consumer Credit | Monday, Dec. 7, 3:00 pm, et | $17B | Low importance. A significantly large increase may lead to lower mortgage interest rates. |
| Revised Q3 Productivity | Tuesday, Dec. 8, 8:30 am, et | Up 4.9% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| 3-year Treasury Note Auction | Tuesday, Dec. 8, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 10-year Treasury Note Auction | Wednesday, Dec. 9, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Dec. 10, 8:30 am, et | 750K | Important. An indication of employment. Higher claims may result in lower rates. |
| Consumer Price Index | Thursday, Dec. 10, 8:30 am, et | Up 0.1%, Core up 0.1% | Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
| 30-year Treasury Bond Auction | Thursday, Dec. 10, 1:15 pm, et | None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Producer Price Index | Friday, Dec. 11, 8:30 am, et | Up 0.2%, Core up 0.2% | Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, Dec. 11, 10:00 am, et | 77.0 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Consumer Sentiment
In the US, the consumer is often seen as the driving force of the economy. A large percentage of the total economic output is for personal use. Analysts attempt to predict the future spending patterns of consumers to gauge economic activity. The Michigan consumer sentiment index is one piece of data used to measure consumer attitudes. The index is derived from a telephone survey, which gathers information on consumer expectations of the overall economy. The preliminary report is released around the 10th of each month and then is revised throughout the remainder of the month. It is significant in that it provides a precursor into consumers’ willingness to spend in the months ahead. However, many analysts point out that willingness to spend does not always convert to actual expenditures.