Employment Report: The Weekly Market Update

Jobs -- Jobs -- Jobs
Jobs -- Jobs -- Jobs

Jobs - Jobs - Jobs

The job numbers for March give us another indication of where our economy is headed in the short-term. The headline numbers showed 103,000 jobs added and an unemployment rate of 4.1%. While the number of jobs added was disappointing, the report followed a very high number of jobs added for the previous month which was not revised downward. In addition, each month we look at wage growth to see whether inflation is starting to rear its ugly head. March saw wage inflation in line with expectations — a good sign.

The markets are also watching for movements in the labor participation rate, as this measure tells us where there is potential for growth in employment. Even though the headline numbers say that we are at full employment, there are millions who are available to come back into the workforce. When there is more demand for workers, those who are not participating are more likely to become employed, thus raising the labor participation rate. In March, the labor participation rate fell slightly from a five month high and thus there continues to be room for improvement within this indication.

Considering that the markets have turned much more volatile since the first of the year, what do these numbers tell us? To answer that question, we must understand why the markets seem to be uneasy. It is very easy to blame rising interest rates and certainly the movement of rates is a factor. But we must also remember that the markets have had quite a run and there is always a concern as the when the markets might lose some energy. In reality, there are several factors at work and the jobs numbers only serve to put one other factor into the pot which is being stirred enthusiastically this year.

The Weekly Market Update

Rates on 30-year fixed home loans moved down last week. For the week ending April 5, Freddie Mac announced that 30-year fixed rates fell to 4.40% from 4.44% the week before. The average for 15-year loans also decreased to 3.87% and the average for five-year adjustables also moved down to 3.62%. A year ago, 30-year fixed rates averaged 4.10%, higher than today's level.

Attributed to Len Kiefer, Deputy Chief Economist, Freddie Mac -- “After dropping earlier this week on trade-related anxiety in the financial markets, the benchmark 10-year Treasury stabilized on Wednesday, but at a level slightly lower than from the start of last week. Rates on home loans followed suit for the second consecutive week. Though rates on 30-year fixed loans are up 0.3 percentage points from the same week a year ago, a robust labor marking is helping home purchase demand weather modestly higher rates.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.