Overview: After falling to the lowest levels in years, investors pushed mortgage rates higher over the past week. This was not primarily the result of significant economic news or surprising data, but simply reflected portfolio adjustments to reduce risk prior to of a couple of major central bank meetings.

The important monthly Employment Report contained mixed results and had just a minor effect on mortgage rates. A small shortfall in job creation was offset by wage gains, which modestly surpassed expectations. The economy added just 130,000 jobs in August, below the consensus forecast of 150,000. In addition, downward revisions subtracted 20,000 jobs from the results for prior months. The unemployment rate remained at 3.7%, as expected. Average hourly earnings, an indicator of wage growth, rose 0.4% from July, above the consensus of 0.3%.

While last week’s data revealed that the Institute for Supply Management (ISM) Manufacturing Index unexpectedly fell below 50, the ISM Services Index posted much larger than expected gains, to 56.4. Readings above 50 indicate an expansion, while readings below 50 indicate a contraction. Manufacturing activity has been slowed in recent months by increased trade barriers such as tariffs, but the bulk of the U.S. economy has continued to display solid growth.

The latest news about the negotiations between the U.S. and China suggested that both sides remain open to trying to reach a mutually beneficial deal. On Thursday, officials announced that another round of trade talks will take place early in October.

Week Ahead

September 12 — European Central Bank meeting

September 12 — Consumer Price Index (CPI)

September 13 — Retail Sales report

September 18 — U.S. Federal Reserve meeting