Napa Mortgage News

Signs of Slower Growth

Over the past week, the effects of a batch of weaker than expected economic reports more than offset a higher than expected inflation reading. As a result, mortgage rates ended the week a little lower.

In addition, job openings declined, and the Philly Fed manufacturing index fell short of the consensus. Comments from the Fed did not improve the outlook. The Fed's Beige Book reported that economic growth in recent weeks was "modest" and that wage gains were "mostly subdued."

Slower growth should reduce inflationary pressures, but the September core consumer price index (CPI), which excludes food and energy, rose 1.9% for the year, up from 1.8% in August. This was the highest reading since July 2014. The inflation rate is a key factor in the Fed's decision about raising the federal funds rate. Fed officials will be watching to see if this is the start of an upward trend.

Next week, the Economic Calendar will be light. The highlight will be the housing sector data. The NAHB builder sentiment index will be released on Monday. Housing Starts will come out on Tuesday. Existing Home Sales will be released on Thursday.