There were several notable releases this last week, with the largest being the PCE Index — the Federal Reserve’s preferred inflation indicator. The PCE Index may be the more accurate indicator going forward, as data collection for the Consumer Price Index has been recently cut, thereby reducing its reliability. As expected, the inflation numbers have been steadily rising with the PCE Index, indicating that impacts from the tariffs are now filtering into prices for both producers and consumers.
As a follow up, Personal Income & Spending has had a light upturn after the initial panic with the tariffs. Lastly, the job numbers from last week have been unexpectedly weak, showing a slow down of the economy overall due to many factors.
PCE Index
A key measure of inflation posted the biggest increase in four months in June as the delayed effects of higher U.S. tariffs began to filter through the economy, raising questions about whether the Federal Reserve will cut interest rates soon. The PCE index, the Fed’s preferred inflation gauge, rose 0.3% last month, the Bureau of Economic Analysis said Thursday. It was the biggest increase since February.
Personal Spending & Income
Americans spent more money in June after U.S. trade wars began to simmer down, but they were cautious spenders amid all the turmoil caused by the Trump administration’s tariffs. Personal spending increased 0.3% last month, the government said Thursday, and partly recovered from a soft patch in May and April.
Employment Reports
The U.S. only added 19,000 jobs in May compared to an initial report of 144,000, and only 14,000 in June after an initial report of 147,000, according to the BLS. Those two paltry totals, plus a July jobs gain of 73,000, means the U.S. added just 106,000 jobs over the past three months.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates saw a decrease of -0.02% with the current rate at 5.85%
- 30-Yr FRM rates saw a decrease of -0.02% with the current rate at 6.72%
MND Rate Index
- 30-Yr FHA rates saw a decrease of -0.17% this week. Current rates at 6.22%
- 30-Yr VA rates saw a decrease of -0.16% this week. Current rates at 6.24%
Jobless Claims
Initial Claims were reported to be 218,000 compared to the expected claims of 222,000. The prior week landed at 217,000.
What’s Ahead
Next week will be a fairly light week, with the most significant releases being the Trade Balance as well as the Services PMI reports.