Quiet Week

It was a very light week for economic reports with few market moving events. As a result, mortgage rates ended the week with little change.

The Department of Labor releases the total number of new claims for unemployment insurance each week. The latest reading was 226,000, up from 218,000 last week and slightly above the consensus forecast. Bigger picture, this was far below the inflated figures seen during the early months of the pandemic, and in line with the levels which were typical during 2019. Weekly jobless claims are important because they are one of the timeliest indicators of labor market trends. While other recent economic reports suggest that companies may be scaling back on hiring new employees, this report indicates that they remain reluctant to lay off workers.

The U.S. trade deficit surged to a record high of around $140 billion in March, as companies and consumers rushed to purchase ahead of potentially higher prices due to increased tariffs. With the easing of trade tensions, however, more typical levels have returned over the last few months. In June, the deficit was down to just $60 billion, which was below the consensus forecast.

Looking ahead, investors will continue to look for additional information about tariffs and monitor comments from Fed officials for hints about monetary policy later in the year. For economic reports, the Consumer Price Index (CPI), a widely followed monthly inflation indicator that looks at the price changes for a broad range of goods and services, will come out on Tuesday. The Producer Price Index (PPI), another monthly inflation indicator, will be released on Thursday. Retail Sales and Import Prices will be released on Friday. Since consumer spending accounts for over two-thirds of U.S. economic activity, the retail sales data is a key measure of the health of the economy.