Consumer credit came in below expectations

Weekly Highlights

• Initial jobless claims fell in the week ended August 10. Continued strength is evident with the release of last weeks data. Claims were below expectations at 213,000, and the unemployment rate remains low at 3.9%

• Mortgage applications fell in the week ended August 10. The Mortgage Bankers' Association's composite index of mortgage applications, which includes both purchases and refinancing, fell 3.0% for the week. Refinancing activity fell by 0.5 percentage points, and mortgage rates were steady at 4.84%. Higher interest rates, as expected, are taking a toll on mortgage activity, and do not bode well for a housing market already showing little life.

• Consumer credit came in below expectations. After a spike in June, consumer credit fell to $10.2 billion, as consumers held back from adding to their credit card debt and even paid off some, following the spending spree of previous months.

• Consumer Price Index (CPI) slowly increased in July. Consumer prices rose 0.2% in the latest monthly release, and year to year are now up 2.9%. Driving the increase for the year and accounting for 60% of the monthly increase was the index for shelter (housing). However, energy prices were holding the CPI down for the month of July, which showed a modest decline in gasoline, electricity, and gas utilities.

Talking Points

• Global equity markets were mostly up on the week through Thursday. Of major markets, Russia and Latin America lagged the most, returning -4.2% and -3.5%, respectively. On the other end, China was the market leader for the week along with other major markets in Asia.

• The Treasury yield flattened modestly through Thursday. Yields on notes and bonds with maturities longer than three years decreased slightly, while shorter-term maturities saw a slight increase. •Commodities were slightly positive for the week. Energy and Gold were the largest detractors through Thursday., whereas Agriculture fared much better.

• The US Dollar rose this week against a basket of major trade partners' currencies. The index has experienced somewhat of a rally off lows from earlier in the year, as it seems the currency may be "winning" the trade war..

• In other economic news: The Federal Reserve's (the Fed) balance sheet is up $2.4 billion for the week, and assets reside at $4.258 trillion in total. However, they are down $202.4 billion from the balance sheet unwinding that began in October 2017.

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