Mortgage bond prices finished the week lower which put upward pressure on rates. Rates were near neutral the beginning on the week but fell mid-week. The employment data was mixed. ADP payrolls showed the economy added 154K jobs in September. Economists expected the creation of 171K jobs. Weekly jobless claims printed at 249K and continuing claims, a summation of all receiving benefits, at 2,025K. Expectations were for claims at 265K and continuing claims at 2,062K. The heavyweight employment report came in along the same lines as the ADP data. The Unemployment rate was 5% vs. the expected 4.9%. Payrolls rose 156K versus the expected 176K increase. Both ADP and the BLS report were weaker than expected. Mortgage interest rates finished the week worse by approximately 1/2 of a discount point..
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.
American consumers still face economic uncertainty, housing market fluctuations, and stock volatility. Look for any variation in the sentiment figure to cause mortgage interest rate volatility.