Positive Forecast – while many companies and shoppers are tightening their budgets and lowering their forecasts, Dollar General is expecting increased sales. Sales are up 2.4% from Feb-April year over year. Historically, dollar stores thrive during tough economic times and Dollar General is forecasting 3.7% – 4.7% growth in net sales (even in light of Tariffs when the majority of their goods are imported from China).
Mortgage Rates worsened slightly this week as the price of Mortgaged-Backed Securities continued their downward trend. Rates are 0.125% better than this time last year.
Jobs – the Bureau of Labor Statistics (BLS) released their jobs report for May, and it showed 139,000 job creations. The previous two reports were revised lower for a total of 95,000 jobs though, so it is expected this number is juiced as well. Unemployment remained flat at 4.2%, but only because 625,000 people left the labor force market. The U-6 unemployment rate, which is more indicative of a real unemployment rate, remained at 7.8%
Manufacturing – the May ISM Manufacturing report came in at 48.5 which is the third month below 50 and in contraction. Of the 18 industries surveyed only 4 added to payrolls.
Bank Deregulation? Vice Chair of Bank Supervision, Michelle Bowman, spoke this morning and said that she wanted to do a deep review of bank regulation because the leverage ratios were put in place at a different time, and would like the banks to have more access to purchasing Treasuries. This would be helpful for Mortgage Rates.
Mortgage Applications to purchase homes fell 4% last week and are up 18% year over year. Refinance Applications declined 4% and are up 42% year over year. Refinances make up 35% of all applications.