Last week’s economic news was slim due to the Labor Day Holiday. Scheduled releases included the Fed’s Beige Book Report and weekly readings on mortgage rates and new jobless claims.
Beige Book Cites Concerns Over U.S. Auto Industry
Federal Reserve Board members shared anecdotes from their respective regions; of note were concerns about U.S. automakers. Auto production was more than 16 percent lower year-over-year in Cleveland, Ohio. Fed business contacts said that automakers are no longer seeking buildings for expanding production. Analysts said that slowing auto production and sales could indicate slowing economic trends. Auto industry slow-downs could also result in layoffs in auto production and sales.
Economic conditions, in general, continue to improve at a “modest to moderate” rate. August’s Beige Book did not include responses to damage caused by Hurricane Harvey, but damage to Houston and surrounding areas were expected to negatively impact the economy.
Mortgage Rates Mixed, New Jobless Claims Rise
Freddie Mac reported lower fixed rate mortgage rates last week; this was the second consecutive week of record low rates. The average rate for a 30-year fixed rate mortgage dropped by four basis points to 3.78 percent. The average rate for a 15-year fixed rate mortgage was also four basis points lower at 3.08 percent and rates for 5/1 adjustable rate mortgages averaged 3.15 percent. Discount points for fixed rate mortgages averaged 0.50 percent and points for 5/1 adjustable rate mortgages averaged 0.40 percent.
New jobless claims rose sharply to 298,000 new claims filed as compared to expectations of 242,000 new claims and the prior week’s reading of 236,000 new jobless claims filed. Hurricane Harvey was blamed for the surge in new jobless claims. Further impacts on jobless claims were expected as two hurricanes, Irma and Jose, approached Florida on Friday. Severe damage was predicted; the total economic impact will be assessed in the aftermath of the hurricanes.
What‘s Ahead
This week’s economic reports include readings on job openings, inflation, retail sales and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.