Weekly Economic Review: Pending Home Sales & Employment Reports Positive

Posted by Laine Smith on 4/1/16 3:06 PM

Topics: Economy

The biggest factor in the drop of mortgage rates this week was a statement made by Fed Chair Janet Yellen, who confirmed that the Fed still intends to pursue a gradual, patient course toward tightening monetary policy as the economy improves.

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Image courtesy of hywards at FreeDigitalPhotos.net

According to Friday’s Employment Situation report, the labor market is expanding with non-farm payrolls up 215,000 in March, above the 210,000 consensus range. Most notably, the participation sector increased 0.1 percent as more job seekers came into the market, which is a sign of strength. This component is also attributed to the 0.1 percent rise in the unemployment rate which was bumped up to 5.0 percent for the month of March.

Pending home sales were boosted by a surge in the Midwest. The index was up 3.5% overall for the month of February thanks to the 11.4 percent jump in pending sales in the Midwest. The South and West regions also saw gains. This could point to a stronger month of existing home sales for March after plunging 7.1 percent in February.

Last week in the economy:

  • Mortgage rates (the national average) fell 0.10% (10 basis points).
  • The purchase sector of MBA Mortgage Applications increased 2 percent in the March 25 week, up 21 percent year-over-year. Refinance applications fell 3 percent.
  • Initial Jobless Claims increased by 11,000 in the March 26 week to 276,000. This brought the 4-week average up 3,500 to a 263,500 level.
  • Consumer confidence was above the high-end consensus range for the month of March. The index sat at 96.2 compared to a revised 94 for February.
  • Consumer sentiment increased to 91.0 for the month of March with little change in the expectations and current conditions components.

What's on the economic calendar for the week of April 4, 2016:

Monday: Labor Market Conditions Index

Tuesday: JOLTS

Wednesday: MBA Mortgage Applications, FOMC Minutes, Gallup U.S. Job Creation Index

Thursday: Jobless Claim, Bloomberg Consumer Comfort Index, Consumer Credit

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