Mortgage bond prices finished the week lower which put upward pressure on rates. We started the week on a positive note Monday but sold off most of the remainder of the week. The Fed continued their billion-dollar daily MBS purchases, but it was not enough to keep rates from rising. Surging global food and energy prices fanned inflation fears. US crude oil prices hit highs Friday not seen since 2014. The data was mixed with some releases showing economic strength. Factory orders rose 1.2% vs 1%. The trade deficit was $73.3 vs $70.7B. ADP employment was 568K vs 400K. Weekly jobless claims were 326K vs 345K. Unemployment came in at 4.8% vs 5.1%. However, the payrolls figure was lower than expected at 194K vs 500K. Mortgage interest rates finished the week worse by approximately 3/8 to 1/2 of a discount point.


Economic IndicatorRelease Date & TimeConsensus EstimateAnalysis
HolidayMonday, Oct. 11NoneImportant. No trading Monday. Volatility may occur as trading resumes Tuesday morning.
Consumer Price IndexWednesday, Oct. 13,
8:30 am, et
Up 0.3%,
Core up 0.2%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Producer Price IndexThursday, Oct. 14,
8:30 am, et
Up 0.5%,
Core up 0.4%
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Weekly Jobless ClaimsThursday, Oct. 14,
8:30 am, et
350KImportant. An indication of employment. Higher claims may result in lower rates.
Retail SalesFriday, Oct. 15,
8:30 am, et
Down 0.2%Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
Business InventoriesFriday, Oct. 15,
10:00 am, et
Up 0.5%Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates
U of Michigan Consumer SentimentFriday, Oct. 15,
10:00 am, et
74.0Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Business Inventories

The report on business inventories gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months.

Changes in business inventories slow as the economy approaches a peak and rise as the economy approaches the trough of a recession. Therefore, the change in business inventories is a leading indicator of GDP.

The data for this report, which are published by the Department of Commerce’s Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers’ shipments, in addition to the merchant wholesalers and retail trade surveys.

The data is a mid-tier release. However, in this environment, every piece of data has the potential to cause volatility.