Mel's Blog

Job Gains Fall Short

January 7th, 2018 9:27 PM by Mel Samick

Weaker than expected labor market data was positive for mortgage rates this week. However, this was offset by a rally in the stock market, which pulled assets out of the bond market. The net effect was that mortgage rates ended the week with little change.


The U.S. ended a great year for job growth on a mildly disappointing note. Against a consensus forecast of 190,000, the economy added just 148,000 jobs in December. Despite the shortfall, however, average job gains over the last three months were a strong 204,000. It appears that an early Thanksgiving holiday may have pulled some hiring into November from December in the retail sector.


The unemployment rate remained at 4.1%, the lowest level since 2000. Average hourly earnings, an indicator of wage growth, were 2.5% higher than a year ago, up from 2.4% last month. The small miss in job growth was slightly positive for mortgage rates.


The minutes from the December 13 Fed meeting released on Wednesday contained no significant surprises. At the meeting, Fed officials spent a lot of time debating the likely impact of the recent tax cuts on economic growth. The minutes also revealed that officials remained divided about whether the low levels of inflation seen in 2017 were mostly due to temporary factors or long-term ones. Investor expectations for the pace of future rate hikes were nearly unchanged after the release of the minutes.

Info provided by MBSquoteline

Posted in:General
Posted by Mel Samick on January 7th, 2018 9:27 PM



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