With the FOMC Minutes coming precisely within expectations, there is once again a lot of optimism that the Federal Reserve may cut rates this year. Much of the Q2 data reports show favorable amounts of reduction in inflation as well as a more stable economic outlook for the rest of the year. With the larger reports in PMI Manufacturing numbers and Non-farm Payroll figures, the overall outlook seems to align with the rest of the data points, justifying the more recent optimism about potential rate cuts. This week should give the final results on Q2 inflation results with the new releases of CPI and PPI data reports.
Global US Manufacturing PMI
A key barometer of U.S. factories fell in June for the third month in a row, signaling that an ongoing slump in the industrial side of the economy shows no sign of ending. The Institute for Supply Management’s manufacturing index slipped to 48.5% in June from 48.7% in the prior month. Numbers below 50% signal that the manufacturing sector is shrinking.
U.S. Hourly Wages
Wage growth for the last 12 months ending in June slowed to 3.9% from 4.1%, marking the smallest increase seen since August 2021. At one point, yearly wages were rising as fast as 5.9%. A shortage of labor prompted millions to change jobs in pursuit of better pay, particularly to cope with significant inflation.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates are seeing an increase by 0.09% with the current rate at 6.25%
- 30-Yr FRM rates are seeing an increase by 0.09% with the current rate at 6.95%
MND Rate Index
- 30-Yr FHA rates are seeing a decrease by -0.01% for this week. Current rates at 6.50%
- 30-Yr VA rates are seeing no change for this week. Current rates at 6.52%
Jobless Claims
Initial Claims were reported to be 238,000 compared to the expected claims of 233,000. The prior week landed at 234,000.
What’s Ahead
CPI and PPI are the most relevant reports coming up, with the rest of the week having an extremely light release schedule.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.