In this week’s economic review, the average fixed mortgage rate softened, consumer credit spending weakened, and March job growth was disappointing.
March payroll growth was well below expectations at 103,000. The silver lining of Friday’s report was a 0.3 percent increase in average hourly earnings, which pushed the year-over-year rate up to 2.7 percent. Unemployment held at February’s level of 4.1 percent.
Growth by industry was led by manufacturing (up 22,000) and the professional & business services sector (up 33,000). The temporary help, construction, and retail sectors all posted declines for the month.
Revolving credit spending softened in February with an increase of only $0.1 billion. The result was the lowest in 4 and a half years. Non-revolving credit, which includes student loans and vehicle financing, did increase $10.5 billion in the month but is still a soft reading. Overall consumer credit was expected to rise at least $11.7 billion in February, but together, both revolving and non-revolving credit only increased $10.6 billion.
This week in the economy:
- As of April 5th, the 30-year average fixed rate was 4.40% with 0.5 points, according to Freddie Mac.
- In the week of March 30th, the purchase sector of mortgage applications fell a seasonally adjusted 2 percent, dropping the year-over-year gain from 8 percent to 5 percent. Refinance applications fell 5 percent in the week with the refinance share of mortgage activity falling to 38.5 percent, the lowest share level since September 2008.
- In the week of March 31st, initial jobless claims jumped 24,000 after hitting a 45-year low the week prior. Claims rose to 242,000, much higher than high-end estimates. The 4-week average is up from a revised 225,250 to a level of 228,250.
- The Bloomberg Consumer Comfort Index was increased 4 tenths to a level of 57.2, a new 17-year high.
The economic calendar for the week of April 9th, 2018:
- Wednesday – MBA Mortgage Applications, FOMC Minutes
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Consumer Sentiment, JOLTS
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