The economy showed signs of pushing forward last week, but major pressure on the average American consumer surfaced in the form of rising gas prices.
Overall, it was a mixed bag for mortgage markets.
The Consumer Price Index (CPI) jumped 0.6% last month. This cost of living increase was much larger than expected and mostly the result of surging gas prices at the pump.
If we negate the impact of energy and food, however, the CPI rose just 0.1%. This shows that inflation may not be prevalent in all parts of our daily lives.
Mortgage rates will react to a number of data points this week as traders position themselves ahead of the next Federal Open Market Committee meeting May 9.
The most important releases come in waves this week.
On Wednesday, we’ll see New Home Sales, Existing Home Sales and the Fed’s report on regional economic conditions called the Beige Book.
On Friday, we’ll see how big the economy is with Gross Domestic Product (GDP) and we’ll see how much more (or less) expensive employees are for business with the Employment Cost Index. As businesses pay employees more, they tend to pass those costs on to consumers and that leads to inflation (see CPI above).
Inflation pushes mortgage rates higher.