Following the election results, the University of Michigan’s Consumer Sentiment Report painted a less-than-stellar picture, reflecting stagnation in sentiment. The prior week was relatively light, aside from the Consumer Sentiment data. However, the S&P PMI Industrial Numbers provided a brighter outlook, indicating some acceleration in manufacturing activity as the holiday season approaches. Looking ahead, the coming week is expected to deliver more significant data on inflation, including the Federal Reserve’s preferred inflation indicator, the PCI Index.
PMI Services Index
The economy sped up in November and kept the U.S. on track for another strong quarter of growth, fueled by optimism about falling interest rates and the prospect of a pro-business Trump administration. The first reading of the S&P U.S. Service Sector Index climbed to a 32-month high of 57.0 in November from 55 in the prior month.
Consumer Sentiment (University of Michigan)
The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers. Consumer sentiment continued to rise, according to the final November report for the Michigan Consumer Sentiment Index. The index rose 1.3 points (1.3%) from October’s final reading to 71.8. The latest reading was below the forecast of 73.0.
Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw an increase of 0.03% with the current rate at 6.02%
• 30-Yr FRM rates saw an increase of 0.06% with the current rate at 6.84%
MND Rate Index
• 30-Yr FHA rates saw an increase of 0.06% for this week. Current rates at 6.45%
• 30-Yr VA rates saw an increase 0.08% for this week. Current rates at 6.47%
Initial Claims were reported to be 213,000 compared to the expected claims of 220,000. The prior week landed at 217,000.
What’s Ahead
As the holiday season approaches, next week’s most significant report will center on the PCE Index. Additional reports, including Personal Income & Spending data and the final GDP estimates for the year, will follow.