Last week was a fairly light week, with the non-farm payroll data being the most significant release. The data showed that payrolls are growing at a faster rate than historical trends suggest, which could indicate that inflation is still above the Federal Reserve’s target. In contrast, the upcoming week has a busy schedule, with many important economic releases lined up back to back.
Non-Farm Payrolls
Hourly pay for American workers rose a sharp 0.4% in September – above expectations – to put the increase over the past 12 months at 4.0%. That’s up from 3.9% in the prior month. Wages are rising faster compared to the last few years before the pandemic. Wage gains rose just slightly over 3% on average in 2018 and 2019 before the coronavirus exploded.
If wages keep growing at a 4% rate, it could call into question the Fed’s view that labor costs will remain non-inflationary.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates saw an increase of 0.09% with the current rate at 5.25%
- 30-Yr FRM rates saw a decrease of 0.04% with the current rate at 6.12%
MND Rate Index
- 30-Yr FHA rates saw a 0.25% increase for this week. Current rates at 6.04%
- 30-Yr VA rates saw a 0.26% increase for this week. Current rates at 6.06%
Jobless Claims
Initial Claims were reported to be 225,000 compared to the expected claims of 220,000. The prior week landed at 219,000.
What’s Ahead
Next week will be a heavy week, starting with key inflation reports like the CPI and PPI. These will be followed by the FOMC Minutes, Consumer Credit data, and the University of Michigan Consumer Sentiment report.
ShareOCT
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.