Last week’s economic releases included reports on inflation, core inflation and minutes from the Federal Open Market Committee Meeting held June 18 and 19. Weekly readings on mortgage rates and first-time jobless claims were also released.
Inflation Rate Rises, but Grows at Lowest Pace in Four Months
June’s Consumer Price Index reported the lowest rate of inflation in four months with a year-over-year rate of 1.60 percent growth as compared to May’s year-over-year inflation rate of 1.80 percent. Fuel prices were lower, which helped balance rising costs of rent, clothing and autos. Analysts said that falling inflation rates would be a primary reason why the Fed is likely to cut its key interest rate range later this month.
Core inflation, which excludes volatile food and energy sectors, rose 0.30 percent in June and surpassed expectations of 0.20 percent growth and May’s 0.10 percent growth rate.
Federal Reserve policymakers base their decisions on the Fed’s dual mandate of maintaining maximum employment and economic growth, which is benchmarked at 2.00 percent annual inflation. FOMC members repeatedly state their commitment to reviewing domestic and global economic news and willingness to adjust Fed policy according to changing economic conditions and current events.
Mortgage Rates, New Jobless Claims
Freddie Mac reported little change in average mortgage rates last week; Rates for 30-year fixed rate mortgages were unchanged at 3.75 percent; rates for 15-year fixed rate mortgages rose four basis points on average to 3.22 percent. The average rate for 5/1 adjustable mortgages rose one basis point to 3.40 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
Initial jobless claims fell by 13,000 claims to 209,000 claims filed and was lower than the expected reading of 221,000 new claims filed. The July 4 holiday likely impacted the number of initial claims filed.
This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued and a report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.