As expected, the holiday-shortened week led to extreme volatility in mortgage rates, led by better-than-expected job growth and rising wages for workers.
In conjunction, these two data points lead to increased consumer spending and the prospect of higher spending pushes the economic slowdown likelihood lower.
That’s bad news for mortgage rate shoppers because without a slowdown, mortgage rates are unlikely to make a dramatic decline like they did at this time last year.
There’s not much data this week except for Retail Sales on Friday. You can bet that markets will keep a close eye on this one; it’s a terrific report to gauge whether Americans are spending more dollars (as expected) or not.
The Retail Sales report will be backed up with the University of Michigan Consumer Confidence survey. The survey asks random sets of Americans how they feel about the economy and is used by markets to predict spending patterns in the months ahead.
So, big focus this week on spending as it pertains to economic growth. More spending and high confidence will push mortgage rates higher.