Ho Hum Job Report Leaves Market in Limbo
The most highly anticipated economic report of the month contained just minor surprises. Against a consensus forecast of 200K, the economy added 160K jobs in April, and downward revisions to prior months subtracted another 19K. Although still in positive territory, this was the smallest monthly increase in jobs since last Sept.
Average hourly earnings, an indicator of wage growth, was the lone bright spot at 2.5% higher than a year ago. The weakness in job gains was offset by the strength in the wage data, and the report caused little change in mortgage rates.
In global news, the European Commission, cut its growth forecast for the Eurozone for 2016 and 2017. The data from China released last Tuesday also was disappointing. China’s PMI manufacturing index fell more than expected to a level suggesting contraction. When global economic growth slows, it reduces the outlook for future inflation, which is positive for mortgage rates.
Factors: The JOLTS report will be released on Tuesday. JOLTS measures job openings and labor turnover rates. The report on retail sales will be released on Friday. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator.
For specific rates, contact a Tradition Mortgage loan officer. Otherwise, check back next week for another mortgage industry update.