Rates rise as construction cools and labor takes center stage
The week ended with financing costs edging higher while the real-economy picture stayed mixed. Mortgage rates climbed, residential construction spending retreated, and July job openings held at 7.3 million. At the same time, revised productivity data showed output gains continuing to offset some labor-cost pressure. In the Dominican Republic, the central bank held its policy rate steady as it balances firm domestic activity against inflation and global uncertainty.
01 · RATES & FINANCING
Mortgage rates edge up to 6.71%
Freddie Mac's Primary Mortgage Market Survey put the average 30-year fixed mortgage rate at 6.71% for the week ending September 3, up from 6.66% a week earlier. The 15-year fixed rate rose to 6.04% from 5.98%.
Residential construction spending retreats in July
The U.S. Census Bureau estimated total construction spending at a $2.158 trillion annual rate in July, down 0.5% from June and 3.8% from a year earlier. Private residential spending fell 1.3% to an $859.0 billion annual rate, while private nonresidential spending increased 0.4%.
U.S. job openings were little changed at 7.3 million in July, while hires and total separations each held near 5.1 million. Quits were 3.1 million and layoffs and discharges were 1.7 million; June openings were revised down to 7.2 million.
Productivity improves while unit labor costs rise modestly
Revised BLS data showed nonfarm business productivity rising at a 1.4% annualized rate in the second quarter as output increased 1.7% and hours worked rose 0.3%. Unit labor costs increased 1.2% in the quarter and 1.4% from a year earlier.
The U.S. goods and services trade deficit widened to $88.6 billion in July from a revised $71.2 billion in June. Exports fell 2.1% to $310.7 billion while imports increased 2.8% to $399.3 billion.
The Central Bank of the Dominican Republic kept its monetary policy rate at 5.25% at its August meeting. The one-day repo rate remains 5.75% and the overnight deposit rate 4.50%; the bank expects inflation to converge toward its 4.0% ± 1.0% target range by year-end.
The Bureau of Labor Statistics is scheduled to publish the August Employment Situation at 8:30 a.m. ET on Friday, September 4. Payroll growth, unemployment, average hourly earnings, and revisions to prior months will be the key readings.