"Rainy days seem to wind up sunny, long as you got a little spending money." Jimmy Buffett. U.S. consumers kept the purse strings loose in January, creating a bright spot in what have been hazy days on the economic front.
January Retail Sales rose 0.2 percent marking the third straight month of strong consumer spending, the Commerce Department reported Friday. Spending may have been fueled by lower prices at the gas pump and the belief that strong employment prospects are here to stay. Consumer spending accounts for more than two-thirds of U.S. economic activity.
In other news, Federal Reserve Chair Janet Yellen recognized the U.S. is progressing toward the Fed's goal of maximum employment in her semi-annual report to Congress. However, the continued drop in oil prices and the strength of the dollar have negatively impacted the manufacturing sector. Yellen also said foreign economic developments pose risks to U.S. economic growth. Finally, she noted if these factors "prove persistent," they could "weigh on the outlook" for U.S. economic activity.
So why is this important? Weak economic news normally causes home loan rates to improve while strong economic news normally has the opposite result. Right now, home loan rates remain near historically low levels, helping to create a sunny outlook for homebuyers.
If you or someone you know has any questions about the housing market, current rates or home loan products, please contact me.
Posted on February 16, 2016 at 7:53 pm Randy Jeremiah