Quiet Week

There were no major surprises in the economic data released this week. Investors were focused on the latest inflation report, and it came in right in line with expectations. As a result, mortgage rates ended the week with little change.

With inflation in focus, the monthly report on consumer confidence published by the Conference Board has been receiving more attention lately, since it may provide hints about upcoming changes in spending habits. The most recent reading showed a modest decline from last month, matching the consensus forecast. Concern about the political environment was the most common reason cited for the drop in confidence this month. According to the report, fewer consumers planned to buy autos and appliances, but more planned to go on vacation. 

In the housing sector, high mortgage rates in May again were an obstacle to purchasing activity. Sales of new homes in May unexpectedly dropped 11% from April to the lowest level since November and were 17% lower than a year ago. The median new-home price of $417,400 was slightly lower than last year at this time. There were 481,000 new homes on the market at the end of May, the highest level since January 2008.

Investors will continue to watch for Fed officials to elaborate on their plans for future monetary policy. For economic reports, the ISM national manufacturing index will come out on Monday and the national services sector index on Wednesday. The key Employment report will be released on Friday, and these figures on the number of jobs, the unemployment rate, and wage inflation will be some of the most highly anticipated economic data of the month. Mortgage markets will be closed on July Fourth.