Shelter Six:  Retail Sales Surge

October 19, 2020 by · Leave a Comment 

Expect mortgage rates to be more volatile over the next few weeks with the election drawing near and continued covid uncertainty.

Remember, when it comes to rates, bad news is good news.  The more uncertainty, confusion, or weakness there appears to be, the more rates will hold steady or even drop.

Likewise, the more stable things are or if the fight against covid goes better than expected, the more likely rates will push up.

Retail Sales jumped 1.9% from August, have shown 5 straight months of gains, and are now above the levels seen prior to the pandemic.

Consumer spending accounts for over two-thirds of all economic activity in the U.S., so the Retail Sales figures are a key indicator of growth.

Contributing to the low rates this year is low inflation, and September’s Core CPI figure of only 1.7% indicates that low inflation seems here to stay.

Rate Update

Last week’s major economic data was mixed and had little impact, but an increase in coronavirus cases around the world helped rates hold steady around 3% and near record lows.

This Week

This will be a very light week for economic data with the spotlight on the housing sector.  Existing Home Sales will be released on Tuesday and Housing Starts on Thursday.