Daily Commentary by Larry Baer: The
Commerce Department reported consumer spending rose in August by the most in
six months. The increase in spending was
largely driven by higher gasoline prices, which rose 28.2 cents per gallon last
month. Personal incomes edged up 0.1% but
the gain was eroded by a matching 0.1% rise in core inflation. This data strongly hints economic growth in
the third-quarter of 2012 will be slow - a condition almost certain to prove
supportive of the prospects for steady to perhaps fractionally lower mortgage
interest rates. The likelihood the
economy will accelerate in any meaningful way prior to end of the year is very
low.
Looking ahead to the coming week -- mortgage
investors will be keenly attuned to Monday's Institute
of Supply Management's
report on manufacturing activity in September and to the companion service
sector report on Wednesday. As usual
Thursday morning's weekly initial jobless claims report will draw attention as
will the minutes from the Fed's September 12th and 13th
meeting released later that same afternoon.
All of these prior reports will be relegated to little more than
background noise when the Labor Department releases its' September nonfarm
payroll figures early Friday morning.
The entire battery of upcoming economic news is currently expected to be
-- at worst, mortgage interest neutral -- and at best, slightly mortgage
interest rate friendly.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
