It was a week of some good and some bad news for the economy, with investors mixed reactions.

Tuesday we got the Q2 productivity numbers: DOWN 0.5%;  our Unit Labor Costs were up 2% (costs being up indicates possible inflation).

Friday we got July’s Retail Sales numbers, which were unchanged.  Taking out auto sales, it was actually DOWN 0.3%. (Aren’t summers for traveling and spending?) The July Producer Price Index fell 0.4%; the core rate was unchanged.

This week is a quiet week in economic data: the July housing starts and permits and then the July Consumer Price Index (CPI). If we are making more money, are the prices of goods going up? Stay tuned…

The price indicators that we got this week seem to indicate that the Fed will have a hard time raising the prime rate this year. If August’s numbers and the Q3 numbers are flat, we will probably see a lowering of rates, as we almost always do in October.

With that mixed bag of good and bad news this week, we saw government loan rates fall; Fannie Mae and Freddie Mac pricing remained the same.