10-Year Treasury Yield
U.S. Treasury yields were higher on Thursday as investors considered remarks from Federal Reserve officials, scanning them for hints about the interest rate outlook. At 6:38 a.m. ET, the yield on the 10-year Treasury was up by over 2 basis points at 4.506%. The 2-year Treasury yield was last at 4.847% after rising by less than 1 basis point.
Consumer Credit
U.S. consumers pull back sharply on credit-card use in March. Total consumer credit slows to $6.3 billion gain versus estimate of $14.8 billion. The numbers: Total consumer credit rose at a much slower pace in March, the Federal Reserve reported Tuesday. Consumer credit rose at a 1.5% annual rate, down from a 3.6% rate in the prior month.That translates into a $6.3 billion monthly gain in March, following a $15 billion gain in the prior month.
MBA Purchase Applications
The Market Composite Index, a measure of mortgage loan application volume, increased 2.6 % on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 % compared with the previous week. The Refinance Index increased 5 percent from the previous week and was 6 % lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 % from one week earlier. The unadjusted Purchase Index increased 2 % compared with the previous week and was 17 % lower than the same week one year ago.
Wholesale Trade (Pre)
US wholesale inventories drop by unrevised 0.4% in March. There were decreases in wholesale stocks of metals, hardware, paper, medication as well as apparel, groceries, farm products and alcohol. The Commerce Department’s Census Bureau said on Wednesday (May 8) that wholesale inventories fell 0.4%, as estimated last month. Stocks at wholesalers rebounded 0.2 % in February.
Jobless Claims
Weekly jobless claims are one of the timeliest indicators of when the economy is starting to undergo serious deterioration: exampole, the magnitude of new layoffs in one week could look worrisome
Initial filings for unemployment benefits have hit their highest level since late August 2023, a potential sign that an otherwise robust labor market is changing. Jobless claims totaled a seasonally adjusted 231,000 for the week ending on May 4, up 22,000 from the previous period and higher than the Dow Jones estimate for 214,000, the Labor Department reported Thursday. It was the highest claims number since Aug. 26, 2023. The increase in claims follows a string of mostly strong hiring reports, though hiring in April was light compared with expectations. Also, job openings have been declining amid expectations that the labor market is likely to slow through the year.
Mortgage Rates
The average 30-year fixed mortgage rate dipped back toward 7% this week, settling at 7.09%, according to Freddie Mac. This is the first time the weekly average rate has fallen in over a month. Recent rate volatility — including this week's drop from 7.22% and last month's steady rise — has prompted some financial institutions to modify their mortgage outlook for the rest of 2024.
Consumer Sentiment
Consumer sentiment tumbles as inflation fears surge.The University of Michigan Survey of Consumers sentiment index for May posted an initial reading of 67.4 for the month, down from 77.2 in April and well off the Dow Jones consensus call for 76. The move represented a one-month decline of 12.7%. The one-year inflation outlook jumped to 3.5%, up 0.3 percentage point from a month ago to the highest level since November 2023.
Treasury Budget
U.S. budget deficit shrinks in first 7 months of fiscal year. But shortfall likely to widen for the full year. The numbers: The federal budget deficit shrank in the first seven months of the fiscal year, according to the Treasury Department, but this full year’s shortfall is likely to exceed last year’s. For the fiscal year to date, the deficit is $855 billion, or 8% less than the same period a year ago. There was a surplus of $210 billion in April, a month that usually sees big inflows of tax payments.
The US federal budget deficit is estimated to rise to $1.7 trillion this year from $1.375 trillion in 2022, according to Goldman Sachs Research. In order to fund rising deficits, the US Treasury department has to issue more debt, so we’re seeing these very, very large amounts having to clear through the market.
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