Provided exclusively to The Mortgage Press by David Beadle, president of BestInfo Inc., the BestRates pager and e mail rate alert service for mortgage industry subscribers. Send your inquiry to bestrates@mortgagepress.com for full details on a free two-week trial subscription.
A reading of “1″ has the lowest impact on rates, while “10″ has the highest. Although carefully verified, data are not guaranteed as to accuracy or completeness. BestInfo Inc. cannot be held responsible for any direct or incidental loss or liability incurred by applying any of the information or opinions in this feature.
October 3
September Auto Sales
Rate Impact: 3
Ford Motor Company’s announcement in mid-September that it will be sharply and rapidly reducing production capacity was one more reminder of the changing face of the automobile manufacturing industry in this country. With 90 percent of so-called “foreign” cars now built here rather than shipped across the ocean, the situation has changed dramatically from what it was in previous decades. And with the computerization and robotics built into the new plants coming on line over the next few years, the days when assembly plants were staffed by legions of blue collar workers are rapidly disappearing. For analysts trying to read the economic tea leaves, a change is required to avoid misinterpretation of the inflation outlook. This will be partly due to the fact the high paying but low skilled jobs available in the last century are evaporating.
October 6
September Employment
Rate Impact: 9
With the FOMC scheduled to meet again on Oct.24 and 25, this will be the last employment report before the gathering. However, jobs may not be the focus for the Federal Open Market Committee. Instead, the members may be concentrating on the inflation outlook in light of the dramatic drop in energy prices which took place during September. It wasn’t merely gasoline. The price of natural gas plunged to a two-year low, and other home heating fuels followed suit in advance of the winter season. In addition, the government issued a preliminary long-range forecast calling for a milder winter across the northern tier of states due to the development of an El Nino weather system in the Pacific Ocean. If it has the expected impact, the result could be reduced demand combined with plentiful supplies. In short, a “perfect storm” of good news for those whose family budgets were literally crushed last year by brutal heating costs.
October 11
September FOMC Minutes
Rate Impact: 5
Here’s the key question: Does the Federal Open Market Committee believe consumers will spend the savings from lower gasoline and home heating bills, or will the cash be placed in piggy banks? The answer may determine the future direction of Fed interest rate policy. Unfortunately, the Fed may duck the question at the Sept. 20 meeting, which occurred only shortly after the gasoline price drop and before winter heating bills began to arrive. Therefore, we may have to wait until November or later for Fed officials to address the issue in their released meeting minutes. And there’s always the possibility that some adverse event such as a disruption of oil shipments may reverse the drop in prices, thereby rendering the matter moot in regard to gasoline and distillates such as diesel fuel, propane and home heating oil.
October 13
September Retail Sales
Rate Impact: 8
With vehicle sales having sunk in August from buoyant July levels, traders will observe whether or not they rebounded as clearance efforts accelerated with such tried and true measures as zero percent financing on some models. The outcome could have a significant impact on overall retail sales, which were disappointing during the back-to-school promotional period. Naturally, retailers are always looking for new ways to get shoppers through the door, and the latest development is the ever-earlier beginning to the holiday merchandise season. Just as back-to-school has back-tracked into early July, look for the promotional calendar for the December holidays to be skewed not only into October (which has already become a key shopping month), but into September as well. However, since the government’s surveys typically take place during the middle of a month, the impact is unlikely to show up in the federal statistics.
