Today's Economic Data Highlights - Consumer Credit And The Fed
Following this morning’s report of a decline in mortgage applications, it’s all from the Fed this afternoon – the beige book, a Fed speech, and the monthly report on consumer credit…
The Mortgage Bankers Association’s index of mortgage applications fell 1.5% last week despite a 6.3% increase in purchase loan applications. Although this index is at its highest point since mid-May, that is still depressed, following the April 30 deadline for home sales contracts to qualify for the homebuyer tax credit.
14:00: Federal Reserve beige book…confirmation of softer data? This report covers the second half of July and all of August. We have seen only a few data points for August, most of which came in at or above reduced expectations. We suspect the tone of the beige book will remain subdued. The San Francisco Fed is due for the summary.
14:30: Minneapolis Fed President Narajana Kocherlakota speaks on “Inside the FOMC”…at a business lunch in Missoula. This is the same title of a speech he gave last month in Michigan, where he argued that the labor market was suffering from an increase in the mismatch between jobs and unemployed workers and that keeping the funds rate close to zero could increase the probability of deflation. Mr. Kocherlakota is one of seven who were cited in a recent Wall Street Journal article as having reservations about the FOMC’s recent decision to reinvest repayments of principal on agency debt and mortgage-backed securities (MBS). His first turn as a voting member of the FOMC comes in 2011.
15:00: Consumer credit for July…more paydowns? The paydown in consumer debt continued in June, and all but two of the 35 economists forecasting this indicator look for another decline in July; those two see no change.
Median forecast (of 35): -$4.5bn, ranging from -$7bn to flat; last -$1.3bn.