Underlying inflation at the consumer level warmed up a bit in June with the biggest increase occurring since January 2018. The Core Consumer Price Index (CPI), which strips out volatile food and energy, rose by 0.3% in June led by increases in prices for apparel, used cars and trucks along with household furnishings. On an annual basis, the Core CPI rose 2.1% from the 2% recorded year-over-year in May. The Federal Reserve will closely dissect this number along with incoming economic data in the coming weeks ahead of the two-day FOMC meeting on July 30-31.
Mortgage rates were unchanged this week and remain near three-year lows as the market stabilizes after pushing lower since the highs seen last November. Freddie Mac reports that the 30-year fixed-rate mortgage was unchanged this week at 3.75% with an average 0.5 in points and fees. Sam Khater, Freddie Mac’s chief economist, says, “While rates have moderated, we’re still at nearly three-year lows, which is good news for buyers looking to purchase a home before school starts.”
Americans filing for first-time unemployment benefits fell to a three-month low in the latest week and are at lows seen around 1970. The Labor Department reports that weekly initial jobless claims fell by 13,000 in the latest week to 209,000 signaling continued strength in the sector which could boost the somewhat slowing US economy. The four-week moving average of initial claims, which irons out seasonal abnormalities, fell 3,250 to 219,250 last week. There have been no signs of an uptick in layoffs related to the US/China trade wars thus far.