Weekly Economic Review: Mortgage Rates Continue to Slide

Posted by Laine Smith on 6/11/17 10:00 AM

Topics: Economy

In this week’s economic review, mortgage rates continued their month-long slide, job opportunities were fruitful in April, and consumers didn’t spend much on credit, despite continuing consumer confidence.

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iStockPhoto/ sasun1990

Job Opportunities

The gap between hiring and job opportunities continues to widen with openings nearly 1 million ahead of hirings. Job openings came in at 6.044 million in April, blowing past Econoday’s high estimate of 5.765 million. This is the highest amount of job openings since the Bureau of Labor Statistics started tracking in 2000.

Hiring was set back to 5.051 million from March’s 5.304 million. Job sectors like hospitality and food services saw job vacancies rise to all-time highs in the month.

Job Creation

The Gallup U.S. Job Creation Index tied for the record high in May, hitting the 37-point mark. This is the 15th month in a row that the index has hit a 30+ reading. In May, 46 percent of employees said their employer was hiring and only 9 percent of employees said their company was letting people go.

Consumer Spending

Marking the fourth straight month of +$100 in daily spending, consumers reported spending a daily average of $104 in May, down just $3 from April. This is the highest amount of spending in May since 2008 when spending averaged $114.

Consumer Credit

Despite reports of high consumer optimism, credit growth slowed immensely in April to an increase of $8.2 billion against Econoday’s median estimate of $17 billion. This is the slowest month-over-month reading in nearly 6 years.

Non-revolving credit was the weak link, rising only $6.7 billion, but revolving credit was also soft, up just $1.5 billion after a $5.4 billion increase in March.

This week in the economy:

  • The 30-year fixed-rate decreased as of June 8th, landing at 3.89% with 0.5 points, according to Freddie Mac.
  • Purchase applications increased a seasonally adjusted 10 percent in the week of June 2 after three straight weeks of declines. Refinance applications increased a seasonally adjusted 3 percent but the refinance sector of mortgage activity is still down 1.1 percentage points, according to MBA Mortgage Applications.
  • Initial jobless claims dropped 10,000 in the week of June 3, according to Bloomberg, after a spike due to estimates coming in after the Memorial Day weekend. The 4-week average is up slightly at 242,000.
  • The Bloomberg Consumer Comfort Index fell back from an expansion high in the week of June 4. Dropping 1.3 points form the week prior, the index currently sits at a still-very-solid 49.9.

The economic calendar for the week of June 12th, 2017:

  • Tuesday – FOMC Meeting Begins
  • Wednesday – MBA Mortgage Applications, Consumer Price Index, Retail Sales, FOMC Meeting Announcement, Fed Chair Press Conference
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Housing Market Index
  • Friday – Housing Starts, Consumer Sentiment

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