Interesting Jobs Data: The Weekly Market Update

Interesting Jobs Data: The Weekly Market Update

What the Numbers Mean

Every month the jobs numbers are of major interest to analysts who are looking for direction with regard to the economy. In essence, there is no up-to-date economic statistic which is more important, as job growth is the spark which can spur on economic growth, as well as inflationary concerns. In addition, there are certain employment reports that seem to attract even more interest because of other events occurring before, or as the data are being released.

March’s jobs numbers were no exception in this regard. This month, the numbers took on more importance because of these additional circumstances. For one, the report followed a pretty strong jobs report released last month. Two strong months of jobs growth could have provided a signal to the Federal Reserve Board, whose members will be considering when to raise rates again. To make the timing more interesting, the minutes from the last Fed meeting were released two days before the jobs report. These minutes give us a feel as to how the Fed is likely to react to the numbers, not only with regard to increasing rates, but also regarding paring off their portfolio of bonds and mortgages.

The report was also released after the stock market rally hit a pause in the second half of March, which enabled long-term interest rates to ease back down. A strong report had the potential to refuel the stock market rise and higher rates quite quickly. Thus, when the numbers were released on Friday, the increase of less than 100,000 jobs and the downward revision in the previous months’ gains, as well as stable wage growth, all seemed to have signaled that the economy is not running too hot — despite the drop in the unemployment rate. Weather factors may have affected the extreme variations from month-to-month and, thus, one should not be coming to any conclusions regarding one month of weak employment growth. Additionally, it will be hard to measure the immediate reaction to the news with the escalation of the Syrian conflict going on at the same time as the report was issued.

The Weekly Market Update

Rates moved down for the third week in a row, though the data was released before the employment report was issued. For the week ending April 6, Freddie Mac announced that 30-year fixed rates fell to 4.10% from 4.14% the week before. The average for 15-year loans decreased to 3.36%, and the average for five-year adjustables moved up slightly to 3.19%. A year ago, 30-year fixed rates averaged 3.59%.

Attributed to Sean Becketti, chief economist, Freddie Mac -- "The 10-year Treasury yield was relatively unchanged this week, while 30-year fixed rates fell 4 basis points to 4.1 percent. After three straight weeks of declines, the 30-year fixed rate is now barely above the 2017 low. Next week's survey rate may be determined by Friday's employment report and whether or not it can sustain the strength from earlier this year."

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.