Economic Roundup: Week of October 29, 2012

In a week packed with a Fed meeting, significant economic data, and Treasury auctions, there were no major surprises last week.  European events, often a source of market moving headlines, also had little impact.  As a result, mortgage rates ended the week slightly lower.

After the Federal Reserve’s blockbuster announcement for a 3rd round of quantitative easing at its last meeting, investors were anticipating no policy changes at last week’s Fed meeting.  As expected, the Fed’s statement that the economy is growing only “modestly” was very similar to last month’s statement and supportive of the current bond buying program known as Quantitative Easing 3 (QE3).

Friday’s release of third quarter Gross Domestic Product (GDP), the broadest measure of economic activity, increased at a 2.0% annual rate, slightly above the consensus forecast of 1.9%, and up from 1.3% in the 2nd quarter.  Many economists feel that a 2.0% growth rate is generally consistent with a steady labor market, but that a faster pace is necessary to see significant improvement in the level of employment.  A primary reason for the loose Fed policy is to help boost economic growth and create new jobs more quickly.

Also last week, Consumer Sentiment rose to the highest level since 2007 , oil prices declined to the lowest level since the middle of July , and New Home Sales increased to the highest level since April 2010 .

The biggestUSeconomic report this week will be the important Employment data on Friday.  As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month.  Before the employment data, Personal Income and Core PCE inflation will come out today, Chicago PMI Manufacturing on Wednesday, and Productivity, ISM Manufacturing, and Construction Spending on Thursday.  Consumer Confidence and Factory Orders will round out a busy schedule.

October 30, 2012 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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