Financial Reports

With the CPI and PPI scheduled for release in the upcoming week, the previous week was lightly peppered with a small amount of impactful financial data releases. The highlight was the S&P Manufacturing PMI, which reported final numbers for the year showing better-than-expected improvements in the manufacturing sector. Unemployment data also aligned with expectations, reinforcing the likelihood of a Federal Reserve rate cut remaining on track. Lastly, the Consumer Credit Report had the expected jump just before the Holiday Season as consumers relied on credit to make holiday purchases for the end of the year.

S&P PMI Final

Input cost inflation slowed further, reaching its lowest rate in a year. Meanwhile, output prices increased at a slightly faster pace. The seasonally adjusted S&P PMI stayed below the neutral 50.0 mark, recording 49.7, which indicates only a slight decline in the sector’s health for the month. This was an improvement from October’s 48.5 reading and marked the highest level in the current five-month trend of weakening business conditions.

Unemployment Report

The economy added a seemingly solid 227,000 new jobs in November, but much of the gain was tied to temporary influences instead of resurgence in weakening U.S. labor market. The rebound in hiring followed a paltry 36,000 increase in new jobs in October, when a strike at Boeing and a pair of major hurricanes depressed employment.

Consumer Credit

Total U.S. consumer credit surged in October, rising by $19.2 billion compared to a $3.2 billion gain in the prior month, the Federal Reserve said Friday. This marked the fastest growth since July, reflecting a 4.5% annualized growth rate, up significantly from the 0.8% increase in the previous month.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.14% with the current rate at 5.96%
• 30-Yr FRM rates saw a decrease of -0.12% with the current rate at 6.69%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.10% for this week. Current rates at 6.12%
• 30-Yr VA rates saw a decrease of -0.11% for this week. Current rates at 6.13%

Jobless Claims

Initial Claims were reported to be 224,000 compared to the expected claims of 215,000. The prior week landed at 215,000.

What’s Ahead

A light week, with the largest reports being the Consumer Price Index and Price Producer Index. These have historically been the most impactful reports for inflation.

Leading off with the FOMC Minutes, the Federal Reserve has stated once again they will maintain a “gradual” approach to cutting interest rates, which has aligned with their goals of meeting their target 2% inflation goal. The PCE Index release numbers, the Federal Reserve’s preferred inflation indicator, have shown everything is within expectations. So while the rate cuts may be a gradual process, there is much optimism that they are coming.  Following those reports were the Personal Income Spending, GDP Estimates, and Consumer Confidence pending the holidays. Both the Persona Income and Spending have shown very strong results ahead of the holidays with the income beating expectations. This is met by extremely strong confidence coming from consumers as we see a 16-month high. This is finally corroborated by the GDP revisions which have shown the economy has shown steady growth for the entirety of the year.

PCE Index

The rate of inflation rose in October and moved further away from the Federal Reserve’s 2% goal, confirming a recent uptick in prices that could cajole the central bank into cutting interest rates less aggressively. The Federal Reserve’s preferred personal-consumption expenditures price index climbed 0.2% last month for the second month in a row, the government reported Wednesday.

Consumer Confidence

Consumer confidence reached a 16-month high in November, as Americans grew more optimistic about 2025. This optimism was fueled by rising stock prices, easing inflation, and a strong U.S. job market. The Conference Board reported on Tuesday that its consumer confidence index increased to 111.7 in November, up from a revised 109.6 in October, marking its highest level since mid-2023.

Personal Income/Spending

Consumer spending grew at a solid pace in October, driving a U.S. economic expansion that shows no signs of slowing as 2024 comes to a close. According to government data, household spending increased by 0.4% last month, while personal income rose by 0.6%, aligning with Wall Street expectations. Additionally, spending in September was significantly stronger than originally reported.

GDP Estimates

The U.S. economy grew at an annual rate of 2.8% in the third quarter, according to revised figures, suggesting it entered the crucial holiday shopping season with strong momentum.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.08% with the current rate at 6.10%
• 30-Yr FRM rates saw a decrease of -0.03% with the current rate at 6.81%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.23% for this week. Current rates at 6.22%
• 30-Yr VA rates saw a decrease of -0.23% for this week. Current rates at 6.24%

Jobless Claims

Initial Claims were reported to be 213,000 compared to the expected claims of 220,000. The prior week landed at 217,000.

What’s Ahead

The schedule is fairly packed, featuring key reports such as the Final Manufacturing PMI, which will reflect the year’s production performance, along with non-farm payrolls, hourly earnings, the unemployment rate, consumer credit data, and the year-end Consumer Sentiment report from the University of Michigan.

Following the election results, the University of Michigan’s Consumer Sentiment Report painted a less-than-stellar picture, reflecting stagnation in sentiment. The prior week was relatively light, aside from the Consumer Sentiment data. However, the S&P PMI Industrial Numbers provided a brighter outlook, indicating some acceleration in manufacturing activity as the holiday season approaches. Looking ahead, the coming week is expected to deliver more significant data on inflation, including the Federal Reserve’s preferred inflation indicator, the PCI Index.

PMI Services Index

The economy sped up in November and kept the U.S. on track for another strong quarter of growth, fueled by optimism about falling interest rates and the prospect of a pro-business Trump administration. The first reading of the S&P U.S. Service Sector Index climbed to a 32-month high of 57.0 in November from 55 in the prior month.

Consumer Sentiment (University of Michigan)

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers. Consumer sentiment continued to rise, according to the final November report for the Michigan Consumer Sentiment Index. The index rose 1.3 points (1.3%) from October’s final reading to 71.8. The latest reading was below the forecast of 73.0.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.03% with the current rate at 6.02%

• 30-Yr FRM rates saw an increase of 0.06% with the current rate at 6.84%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.06% for this week. Current rates at 6.45%

• 30-Yr VA rates saw an increase 0.08% for this week. Current rates at 6.47%

Initial Claims were reported to be 213,000 compared to the expected claims of 220,000. The prior week landed at 217,000.

What’s Ahead

As the holiday season approaches, next week’s most significant report will center on the PCE Index. Additional reports, including Personal Income & Spending data and the final GDP estimates for the year, will follow.