Productivity and Costs (Quarterly)
The first event of the week will come early Tuesday morning when revised 3rd Quarter Productivity numbers are posted. This index is expected to show a small upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for the bond market. It's the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate in productivity of 3.3%, up from the previous estimate of 3.1%. The higher the reading, the better the news for the bond market. Although, this report generally does not have a noticeable impact on mortgage pricing, so it will take a wide variance to draw much attention.