Jose Diaz - Loan Officer
Mortgage News For The Week Ended July 8, 2022

Solid Job Gains

This week, the highly anticipated Employment report released on Friday was a little stronger than expected, while the other major economic data was mixed. As a result, mortgage rates ended the week higher.

Against a consensus forecast of just 250,000, the economy added 372,000 jobs in June, which was right in line with the gains seen over the last few months. The unemployment rate held steady at 3.6%, just above the lowest level since 1969. Average hourly earnings, an indicator of wage growth, were an impressive 5.1% higher than a year ago, though down from an even larger annual rate of increase of 5.3% last month.

The JOLTS report measures job openings and labor turnover rates, and the latest data also indicated that the labor market remains very tight. At the end of May, there were a massive 11.3 million job openings, down a little from the record high in March, but over 4 million more than in January 2020 prior to the pandemic. There were 1.9 job openings for every unemployed worker. A high level of openings reflects a strong labor market, as companies struggle to hire enough workers with the necessary skills. A very large number of employees also willingly left their jobs in January. This is viewed as a sign of labor market strength as well, since people usually quit only if they expect that they can find better jobs.

The minutes from the June 15 Fed meeting released on Wednesday contained no surprises. To help the economy recover from the pandemic, the Fed put in place extremely loose policy measures. With the recent surge in inflation, officials have begun to tighten, and the minutes confirmed that fighting inflation is the primary goal now. Aggressive rate hikes likely will continue, even at the risk of slowing the economy. When the federal funds rate has climbed to a more “neutral” level, meaning that it neither boosts nor restrains economic growth, officials will evaluate whether to continue tightening to a restrictive stance. The minutes emphasized that the Fed wants to prevent expectations for a long cycle of higher prices from becoming “entrenched.”

Looking ahead

Investors will continue to look for additional Fed guidance on the pace of future rate hikes and bond portfolio reduction. Beyond that, the Consumer Price Index (CPI) will be released on Wednesday. CPI is a widely followed monthly inflation indicator that looks at the price changes for a broad range of goods and services. Retail Sales will come out on Friday. Since consumer spending accounts for over two-thirds of U.S. economic activity, the retail sales data is a key indicator of the health of the economy.

Source: MortgageTime™ by MBSQuoteline. Last week article click here.

Continue reading...

Get Pre-Approved by Yourself

Get Pre-Approved by Yourself!

Are you looking to get pre-approved by yourself? Here you are in the correct place, your Home Loans in just 1-Click. Please follow the instructions

Contact me