Mortgage rates increased this week, rising to their highest point in almost a month, thanks to persistently upbeat economic data.

A stronger-than-expected GDP reading and a robust read on personal spending in June were among the key data series that helped press bond yields, and the mortgage rates that tend to follow them, higher late last week. Rates have remained elevated in the days since, in part because private payrolls data again exceeded expectations in July. In sum, all these renewed signals of strong underlying economic growth, which tends to raise interest rates, have offset much of the encouraging downward progress on inflation in recent data.

There’s no good evidence linking the uptick in rates to the downgrade of the U.S. Treasury’s credit rating. So far, the net change to yields on government debt has been fairly muted. To whatever extent the credit downgrade is adding to investors’ assessment of the riskiness of U.S. debt – which raises yields – it seems to also be driving a ‘flight to safety,’ pushing investors back into the arms of the U.S. Treasury. 

All told, while rates rose this week, the path forward is, as always, unclear, particularly with a key reading for the U.S. labor market set to be released on Friday. A softer-than-expected jobs report would place downward pressure on mortgage rates as the month of August begins.