Productivity and Costs (Quarterly)
The week’s activities start at 8:30 AM ET tomorrow morning with revised 3rd Quarter Productivity numbers. This index is expected to show a slight upward change 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 bonds. It's the conditions around an expanding economy, such as rising inflation, that hurt bond prices and mortgage rates. Current forecasts are calling an annual rate in productivity of down 0.3%. The stronger the reading, the better the news for the bond market. It is worth noting that this report generally does not have a noticeable impact on mortgage pricing, so it will take a wide variance to draw much attention.