Initial Jobless Claims fell for the first time in three weeks as new filings for state unemployment benefits dropped 24,000. Many market analysts expect that we will continue to see improvement in the labor market over the coming weeks.
Durable Goods Orders (long-lasting U.S. manufactured goods - for example: an oven) moved upward sharply. Orders for items (excluding transportation and defense) jumped 2.8% last month. This is the largest rise since December 2007. This coincides with the very strong manufacturing data that we have been seeing. This shows that personal and business consumption is on the rise and is very good news for the economy.
Mortgage backed securities (MBS) lost -40 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans to their highest levels in two weeks. MBS pricing decreased (which causes mortgage rates to rise) due to strong economic data such as Initial Jobless Claims, very strong housing data, and Durable Goods Orders. Positive economic news is great for consumers but long term bonds such as mortgage backed securities react negatively due to the increased potential of inflation.
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