A solid labor market coupled with rising home prices has pushed the overall mortgage delinquency rate to its lowest in more than 20 years, reports CoreLogic. The 30 days or more delinquency rate for April was 3.6%, down from 4.3% in April 2018. In addition, no state posted an annual gain in its overall or serious delinquency rate. "The U.S. has experienced 16 consecutive months of falling overall delinquency rates, but it has not been a steady decline across all areas of the country," said Frank Martell, President and CEO of CoreLogic.
The consumer is alive and well in the US due in part to a solid labor market and a slight increase in wages. Retail sales rose 0.4% in June versus the 0.2% expected. When stripping out autos, sales were also up 0.4%, above the 0.2% expected. Within the report, the *control group sales, that feed directly into Gross Domestic Product, jumped 0.7% versus the 0.3% expected. *The "retail sales control group", published by US Census Bureau, represents the total industry sales that are used to prepare the estimates of personal consumption expenditures for most goods - an inflationary number.
Over in the equity markets, stocks are near unchanged after Wells Fargo, Goldman Sachs and JPMorgan reported solid earnings but future Fed rates cuts could impact banks' net interest margins. In addition, the solid retail sales data and the specter of an uptick in inflation could limit further rate cuts in 2019 which is capping any gains for stocks today. A twenty-five basis-point cut to the Fed Funds Rate at the end of the month's FOMC meeting is still showing a 100% probability. Remember, the Fed has stated it will be data dependent on monetary policy going forward.
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