Last week’s economic readings included reports on inflation, mortgage rates, and first-time jobless claims. Monthly reporting on consumer sentiment was delayed.

Consumer Price Index: Inflation Rises in March

The Consumer Price Index rose 0.40 percent in March, which matched expectations and surpassed February’s month-to -month reading of 0.20 percent growth. The March reading showed the highest consumer price growth in 14 months; higher rents, fuel and food prices contributed to month-to-month price gains in March.

The Core CPI excludes volatile food and energy sectors and was unchanged in March although 0.20 percent growth was expected. February’s reading showed 0.10 percent growth. Inflation increased 1.90 percent year over year.

Mortgage Rates Rise

Freddie Mac reported higher mortgage rates last week that stopped weeks of decreasing rates. Mortgage rates for 30-year fixed rate mortgages averaged 4.12 percent and rose four basis points. Rates for 15-year fixed rate mortgages averaged 3.60 percent and were also four basis points higher than during the prior week. The average rate for 5/1 adjustable rate mortgages jumped 14 basis points to 3.80 percent. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Freddie Mac reported fewer mortgage applications in response to higher rates. Potential homebuyers were sensitive to higher mortgage rates, but may not have to wait long for lower rates to return. Low 10-year Treasury yields suggested that mortgage rates are likely to fall and to remain lower during the peak home-buying season. Mortgage rates are expected to stay comparatively low throughout 2019 according to Freddie Mac.

New Jobless Claims Fall To Lowest Since 1969

First-time jobless claims fell last week to 196,000 initial claims filed as compared to the prior week’s reading of 204,000 new claims filed. Last week’s reading was the first to fall below 200,000 initial claims since 1969 and provided another sign of strong labor markets.

Federal Reserve FOMC Minutes Released

The Federal Reserve released minutes of the Federal Open Market Committee meeting held in March. The minutes explained the Committee’s reversal of its plan to raise the target range of the federal funds rate twice during 2019. Committee members said that they were holding off on raising rates due to slowing in domestic and global economic conditions. While Committee members said that the current economy is strong, they were willing to exercise patience in raising rates based on slower growth of home prices and potential impacts caused by Brexit and slowing in China’s economy.

What‘s Ahead

This week’s scheduled economic reports include the National Association of Home Builders Housing Market Index, housing starts and building permits issued and data on retail sales. Weekly reports on mortgage rates and first-time jobless claims will also be released.

Last week’s economic reports included readings on retail sales, inflation and construction spending. New home sales Consumer sentiment readings were posted along with weekly readings on mortgage rates and first-time jobless claims.

Retail Sales Increase after Lowest Reading in 10 Years

Retail sales rose by 0.20 percent in January; analysts expected an increase of 0.10 percent based on December’s negative revised reading of -1.60 percent. Home centers and internet retailers led in overall sales; retail sales without the automotive sector were higher with an 0.90 percent increase in January, which exceeded expectations of an 0.40 percent increase.

December had a negative reading of –2.10 percent. Auto dealers had fewer sales to car rental firms and other business customers; the reading for retail sales excluding automotive sales rose 0.90 percent as compared to expectations of 0.40 percent more sales and December’s reading.

Inflation rose 0.20 percent in February, which matched expectations after a flat reading in January. Core inflation, which excludes readings for volatile food and fuel sectors, rose 0.10 percent, which fell short of 0.20 percent in January.

Construction Spending Rises as New Home Sales Fall

Commerce Department readings for construction spending rose 1.30 percent in January as compared to December’s negative reading of -0.80 percent. The end of the government shutdown likely helped return construction spending return to positive territory, but real estate and mortgage pros said that building more homes is the only solution to persistent shortages coupled with high demand for homes by would-be buyers.

Slim inventories and home prices rising in excess of wages and inflation are factors contributing to fewer eligible buyers. New home sales fell in January, which is not unusual for winter sales. 607,000 new homes were sold on a seasonally-adjusted annual basis in January; 652,000 new home sales were reported in December, but analysts expected a lower reading of 616,000 sales for January.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week with rates for 30-year fixed rate mortgages averaging ten basis points lower at 4.31 percent. !5-year fixed rate mortgages averaged 3.76 percent after falling seven basis points. 5/1 adjustable-rate mortgages averaged 3.84 percent and were three basis points lower. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims rose to 239,000 new claims last week; 223,000 claims were filed the prior week and analysts expected 225,000 new claims. Last week’s first-time jobless claims were the highest in ten years, but analysts said that layoffs haven’t risen significantly, which signals healthy labor markets.

The University of Michigan reported higher consumer confidence in March with an index reading of 97.80. The expected reading was 95.0 based on February’s index reading of 93.80. Increased consumer confidence in economic conditions suggests that more families will enter the housing market. Analysts said rising consumer confidence resulted from the resolution of the government shutdown.

What’s Ahead

Economic readings scheduled this week include reports on homebuilder confidence in housing market conditions, sales of pre-owned homes and Commerce departments on housing starts and building permits issued. The Federal Reserve’s scheduled announcement will be followed by Fed Chair Jerome Powell’s press conference. Weekly reports on mortgage rates and new jobless claims will also be issued.

Last week’s economic news included readings on new home sales, construction spending, and housing starts. Data on building permits was released along with Labor Department reports on public and private-sector jobs and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims were also released.

Construction Spending Slows as New Home Sales Rise in December

Commerce Department data for December indicated less construction spending than for November. Construction spending dipped by -o.60 percent as compared to analyst expectations of a negative reading of -0.30 percent. Construction spending grew by 0.90 percent in November.

Lower cash outlays for winter months are typical; severe winter weather likely slowed construction activity more than usual. Any downturn in building activity pressures housing markets that continue to struggle with short supplies of available homes and high buyer demand.

Sales of new homes rose in December; the Commerce Department reported 621,000 sales of new homes. Analysts estimated 600,000 sales based on November’s reading of 599,000 sales of newly-built homes. December’s reading was 3.70 percent higher than In November and was 7.00 percent lower year-over-year.

Housing Starts, Building Permits Issued Rise in January

Housing starts increased in January with 1.230 million starts annually, which was an 18.60 percent increase from December’s downwardly revised reading of 1.037million starts. 1.215million starts were expected. The revision of December’s reading contributed to the jump in January housing starts. Single-family housing starts rose 25 percent at a pace of 926,000 starts reported.

Building permits rose by 1.40 percent in January to 1,345 million permits issued as compared to December’s reading of 1.326 million permits issued.

Mortgage Rates, New Jobless Claims

Freddie Mac reported higher average mortgage rates last week with rates for fixed-rate mortgages rising six basis points and the average rate for 5/1 adjustable rate mortgages rose three basis points. 30-year fixed mortgage rates averaged 4.41 percent; 15-year fixed mortgage rates averaged 3.83 percent and mortgage rates for 5/1 adjustable rate mortgages averaged 3.87 percent.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims were lower last week with 223,000 claims filed; analysts expected 225,000 new claims based on the prior week’s reading of 226,000 first-time claims filed.

Labor Reports Show Slower Jobs Growth

ADP reported the lowest increase in private-sector jobs since November; February’s reading of 183,000 private sector jobs added reflected declines in jobs within the travel and retail sectors. The Commerce Department reported only 20,000 public and private-sector jobs added for February; this was the lowest reading in 17 months. Analysts cited severe winter weather and seasonal anomalies. Construction and shipping sectors were hardest hit in February.

National unemployment dropped from 4.00 percent in January to 3.80 percent in February.

What‘s Ahead

This week’s scheduled economic news includes readings on retail sales, inflation and the latest reading on construction spending. Lingering effects of the government shutdown continues to impact data released from the Federal government. Weekly readings on mortgage rates and new jobless claims will also be released.