United States economic data released last week showed positive signs of improving economic conditions. As a result, mortgage interest rates increased by the week's end.
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The employment situation reports showed strong payroll growth and an uptick in wage pressures in May. Average hourly earnings were up 0.1% to 0.3%. Year-over-year earnings were up 2.3%, a rate that has only been met twice during the period of economic recovery. The last occurrence was in October 2013.
While the unemployment rate did tick higher to 5.5 percent, the increase reflects an unexpected amount of people entering the labor market in May, which is a signal of improvement. The strength in job gains and wage growth bring about expectations of inflation and the timing of the first federal funds rate hike.
Last week in the economy:
- Mortgage rates (the national average) increased 0.20% (20 basis points).
- Job Openings and Labor Turnover Survey (JOLTS) fell 2.9% to 4.994 million in March from a revised 5.144 million in February.
- The purchase index of MBA Mortgage Applications fell 3% in the week of May 29 coupled with a 12% drop in the refinance index as the average national mortgage rate increased.
- Initial Jobless Claims were down 8,000 in the May 30 week to 276,000, right at the Econoday consensus.
What's on the economic calendar for the week of June 8, 2015:
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