Weekly Economic Review: Mortgage Rates Increase Due to October Job Gains

Posted by Laine Smith on 11/6/15 1:49 PM

Topics: Economy

Mortgage rates reacted negatively this week to comments from Fed officials and a stronger-than-expected employment report.

Economic Update 11-6-15

Following the October meeting of the FOMC, Atlanta Fed President Dennis Lockhart said he was satisfied that Fed members agreed on the alignment of factors mandating a December rate hike but the rate hike is a possibility, not a certainty.

The Fed kept their policy unchanged at the October meeting due to below-target inflation and a lack of job growth since their previous meeting, but Friday's employment report suggested more strength than expected in the labor market.

Highlights from the October employment report included:

  • A 5.0% unemployment rate, the lowest since April 2008.
  • Average hourly earnings were up 0.4% and 2.5% higher than they were a year ago.
  • Non-farm payrolls added 271,000 jobs in October against expectations for 190,000.

Last week in the economy:

  • Mortgage rates (the national average) increased 0.12% (12 basis points).
  • Both the purchase and refinance sectors of the MBA Mortgage Applications report fell 1% in the October 30 week, following weeks of volatile dips and spikes. Year-over-year the purchase index is up 20 percent.
  • Initial Jobless Claims shot 16,000 higher in the October 31 week, though still very low at 276,000.

What's on the economic calendar for the week of November 9, 2015:

Thursday: MBA Mortgage Applications, Jobless Claims and JOLTS

Friday: Retail Sales and Consumer Sentiment

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