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Daily Market Update 8/3/15

Mortgage rates inched lower Monday following a second consecutive day of weaker than expected economic data.  On Friday, the Employment Cost Index rose a mere 0.2% in the second quarter, far below the consensus forecast of 0.6%.  This morning, the Institute for Supply Management manufacturing index declined unexpectedly to 52.7.  Readings above 50.0 indicate expansion in the manufacturing sector.  Construction Spending increased 0.1%, below expectations.  The June Core PCE price index, the Fed’s preferred measure of inflation, rose 0.1%, matching forecast, and was just 1.3% higher than one year ago.  This is well below the Fed’s target level of 2.0%, which may make Fed officials more hesitant to raise interest rates.  No other key data will be released today.

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