Mortgage Market Update – 03-28-14

Americans’ attitudes towards the economy fell to lows not seen since November as higher heating and gasoline costs put a strain on household budgets. The March Consumer Confidence Index came in at 80.0, which was inline with estimates and the February reading. Economic data in 2014 has been a bit disappointing, but the harsh winter weather could have been the reason. As spring blooms, consumers will be looking for signs of more positive economic data, which would confirm that the weather had a big impact on the early year tepid economic numbers.

Consumer spending rose by the most in three months in February on services such as health care and utilities. Personal Spending rose by 0.3% last month, which was inline with estimates. Personal Income also rose by 0.3% last month, which also matched estimates. Within the data it showed that the personal savings rate edged up to a four month high of 4.3% from 4.2% in January. In addition, inflation remained tame as evidenced by a 0.1% rate in the Core Personal Consumption Expenditure, the Federal Reserves favored gauge for inflation.

In an effort to brew up some business, fast food giant McDonald’s will be offering free small cups of coffee at no charge during breakfast hours from March 31 through April 13. The world’s largest restaurant chain is rolling out the campaign for the first time to lure in new customers and to get existing customers to come in more frequently. The company is figuring that it’s likely that those stopping in for the free coffee will purchase a breakfast sandwich or other items.