The release of major economic reports and stock market volatility had little impact on mortgage rates for the second week in a row.
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Friday's employment report came in near expectations. The economy added 173,000 jobs in August, and although that increase was near the low-end estimate, revisions of the previous two months are up a total of 44,000.
The unemployment rate fell to 5.2%, which is not only below the low-end estimate but the lowest of the recovery (since April 2008). Strength also continued in wage gains with average hourly earnings up 0.3% in August and up 2.2% year-over-year.
While investors were looking to the employment report for indication on whether the Fed will increase the federal funds rate in September, the report gave little guidance to investors who are still heavily divided. While many Fed members believe the labor market is on track for an rate hike, the inflation rate is up for debate. Core inflation has remained well below the Fed's 2% target range.
Last week in the economy:
- Mortgage rates (the national average) fell 0.02% (2 basis points).
- The S&P 500 began the week at 1,989 and ended the week at 1,921 (down 3.41%).
- The refinance index of MBA Mortgage Applications jumped 17% while the purchase index rose 4%. The purchase index is up a strong 25% year-over-year.
- Initial Jobless Claims moved up slightly but are still in the range of historically-low levels. Initial claims rose 12,000 in the August 29 week to 282,000 which was above the Econoday high estimate and is the highest reading since early July.
- Gallup's U.S. Job Creation Index was unchanged at 32 in August, the 4th consecutive month. This is the best level in the 7-year history of the report, though.
What's on the economic calendar for the week of September 7, 2015:
Tuesday: Consumer Credit will be released.
Wednesday: MBA Mortgage Applications and JOLTS will be updated.
Thursday: Jobless Claims will be released.
Friday: Consumer Sentiment will be updated.
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