Retail Sales and IP Released this Week; Pending Home Sales Show Gains
April 12, 2010 - Mortgage rates began heading moderately upward last week as markets continued to digest the positive economic news from the previous week. Growing at its fastest pace in more than two years, activity in the U.S. service sector is expanding; the recent ISM Services results imply that economic recovery is beginning to broaden out with March's index rising to 55.4. Any reading over 50 indicates expansion in the service sector.
Encouragingly, pending home sales rose 8.2% in the month of February. The recent rise could signal that home buyers are responding to the $8000 home buyer tax credit as well as indicating that more people are jumping off the fence and purchasing as the economy continues to strengthen.
The upcoming week could see increased rate volatility as markets continue to adjust to the recent cessation of the Fed's program for buying mortgage-backed securities. Retail Sales and Industrial Production reports are also due out this week. The numbers will be watched keenly as both will shine light on consumer growth and inflation.