Overview: There was little movement in mortgage rates over the past week. The major economic data generally was stronger than expected, but the reaction was minor. The minutes from the Federal Reserve meeting did not contain any unexpected information and also had little impact..
The most recent manufacturing data revealed continued strength in the sector. The Institute for Supply Management (ISM) Manufacturing Index rose more than expected to 59.7 in December. Readings above 50 indicate that the manufacturing sector is expanding. The index averaged 57.6 in 2017, which was the highest level since 2004. The growth may continue in 2018 with the help of the recent tax cuts.
The minutes from the December 13 Fed meeting released on Wednesday contained no significant surprises. The minutes revealed that Fed officials remain divided about the future path of inflation. Some feel that the low levels of inflation seen during most of 2017 reflected mostly transitory factors, while others believe that it was due to longer-term trends. Fed officials also debated the expected impact of the tax cuts. They will be closely watching to see the effects on economic activity and on the size of the labor force.
Looking ahead, the key Employment Report will come out on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. The ISM Services Index will also be released on Friday. The Job Openings and Labor Turnover Survey (JOLTS) report will come out on January 9, followed by the Retail Sales report and core Consumer Price Index (CPI) on January 12..