Spotlight on Labor Market
A weaker-than-expected Employment Report helped mortgage rates improve on Friday. Hints that the shortfall was due to temporary factors caused investors to reverse the gains and mortgage rates ended the week a little higher.
According to the Nonfarm Payrolls Report, the economy added just 126K jobs in March, roughly half the consensus forecast of 250K and the lowest reading since December 2013. In addition, downward revisions to prior months subtracted 69K jobs. The Unemployment Rate remained unchanged at 5.5%. The one bright spot in the report was that wage growth was a little stronger than expected. Wages were 2.1% higher than one year ago.
On Monday, the Fed’s Dudley suggested that much of the weakness seen in the Employment Report was due to temporary factors such as bad weather. Other recent labor market data support the notion that the strong job gains seen over the past year likely will resume. The JOLTS Report released this week showed that March began with 3% more job openings than February. Job openings are at the highest level since 2001. The weekly reading for first-time Jobless Claims remained well below the 300K level, which is consistent with a labor market adding jobs at a pace above 200K. The total number of people collecting unemployment benefits dropped to the lowest level since 2000.
Looking ahead, Retail Sales and the Producer Price Index (PPI) will be released on April 14. Since retail sales account for roughly 70% of economic activity, this is one of the most significant reports each month. The PPI focuses on the increase in prices of “intermediate” goods and services used by companies to produce finished products. Industrial Production and the NAHB Housing confidence index will come out on April 15.
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Jerry Vigorito
NMLS# 115522
William Raveis Mortgage, LLC
Company NMLS ID: 2630
7 Trap Falls Road
Shelton, CT 06484
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