Key economic reports released this last week were a bit stronger than expected overall. However, bond investors appear to have been pleased that the data did not reveal any huge upside surprises, and mortgage rates ended the week a little lower.
The economy gains jobs well above forecasts.
Against a consensus forecast of 700,000, the economy gained 850,000 jobs in June, the highest level since August of last year. Particular strength was seen in hospitality and in education. The unemployment rate unexpectedly increased from 5.8% to 5.9%, above the consensus for a slight decline, as more people joined the labor force. Average hourly earnings were 3.6% higher than a year ago, matching expectations, and up from an annual rate of 1.9% last month.
Positive news from ISM.
Another significant economic report released last week from the Institute of Supply Management (ISM) remained at very high levels, as expected. The national manufacturing index came in at 60.6, and readings above 50 indicate that the sector is
expanding. Of note, a large number of companies reported difficulties in hiring enough workers to keep up with growing demand.
Consumer confidence hits a pots-pandemic high.
U.S. Consumer Confidence unexpectedly surged this month to the highest level since February 2020. With the distribution of the vaccine and the reopening of the economy, consumers are feeling better about economic and labor market conditions.
According to the survey, most plan to increase their spending, particularly in areas that were restricted by the pandemic such as travel and eating out.
Major Economic News Due This Week
Looking ahead, investors will closely watch Covid case counts around the world. They also will look for hints from Fed officials about the timing for changes in monetary policy. Beyond that, it will be a very light week for economic data. Most notably, the ISM national services index will come out today. Mortgage markets were closed yesterday in observance of July Fourth.
Mortgage Rates Week of 7-6-2021