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Rate Update

Mortgage rate volatility continued during the first week of the year. Stronger than expected economic data earlier in the week pushed mortgage rates higher before Friday’s employment data led to rates back down to where they began the week. The ISM Manufacturing Index showed expansion in December at the fastest pace in seven months. Production at factories make up about 11% of the US economy. Construction Spending rose in November for a third month, increasing 0.4%. Retail Sales, which can make up as much of 40% of retailer’s annual revenue, rose 3.2% in December following a 5.5% increase in November. ADP, a payrolls firm who monitors jobs in the private sector, showed an increase of 297,000, nearly triple the median estimate in a survey of economists. This was the 11th consecutive monthly gain for private payrolls and the largest jump since ADP records began in 2001. The average number of Jobless Claims over the past four weeks dropped to 410,750, the lowest level since July 2008. The Unemployment Rate fell from 9.8% to 9.4%, the lowest level since May 2009. However, the workforce shrank by 260,000 workers last month, sending down the share of the population in the labor force to a 26-year low of 64.3%. Currently, the 30 Year Fixed is 4.375% (4.504% APR) and the 15 Year Fixed is 3.750% (3.957% APR). This week’s economic data will feature the  monthly inflation reports. The Producer Price Index is due out on Thursday followed by Friday’s Consumer Price Index. Also on the slate are Retail Sales, Industrial Production & Capacity Utilization, Fed Beige Book, Consumer Sentiment and $66 billion Treasury auctions.

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