Last week’s economic readings release included reports on inflation, core inflation retail sales and retail sales excluding autos. Consumer sentiment, along with weekly readings on mortgage rates and new jobless claims were also reported.

Inflation Exceeds Expectations, Retail Sales Lag

Consumer prices rose 0.40 percent in August, which surpassed expectations of 0.30 percent growth and July’s reading of 0.10 percent. Core consumer prices, which exclude volatile food and energy sectors, matched expectations with a reading of 0.20 percent growth and exceeded July’s growth of 0.10 percent.

August retail sales fell to -0.20 percent against expectations of no change from July’s reading of 0.30 percent.

Retail sales excluding auto sales grew by 0.20 percent, which was lower than expected growth of 0.40 percent, which was based on July’s growth rate of 0.40 percent.  

Mortgage Rates Hold Steady, Weekly Jobless Claims Dip

Freddie Mac reported no change for averaged fixed mortgage rates; the rate for a 30-year fixed rate mortgage was unchanged at 3.78 percent. Rates for a 15-year fixed rate mortgage averaged 3.08 percent and was also unchanged from last week’s reading. The average rate for a 5/1 adjustable rate mortgage dropped by two basis points to 3.13 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. The readings for fixed rate mortgages were the lowest in 2017, and provided an ongoing incentive for home shoppers who continued to face high home prices and slim inventories of homes for sale.

New jobless claims were lower at 284,000 new claims filed than last week and were also lower than the expected reading of 300,000 first-time jobless claims The prior week’s reading reported 297,000 first-time jobless claims.

What‘s Ahead

This week’s scheduled economic reports include readings on home builder sentiment, existing home sales, housing starts and building permits issued. The Fed’s Federal Open Market Committee will issue its post-meeting statement and Fed Chair Janet Yellen will give a press conference. Weekly readings for mortgage rates and new jobless claims will also be released. 

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 impact 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.