Which Report Was Right? The Weekly Market Update

Big Week Kicks Off May

Big Week Kicks Off May

This week we will get evidence of which jobs report was an accurate depiction of the current employment picture. The January and February jobs report showed major increases of over 200,000 jobs. The March jobs report showed a relatively modest increase of just under 100,000 jobs. The average for the past 12 months has been about 180,000 jobs per month and, therefore, the quarterly numbers were right on target in this regard.

The question is, will we return to the strong numbers of January and February, stay with the lower figure for March, or move back to the norm? If you are confused as to where the true numbers lie, imagine what the Federal Reserve Board must be thinking when they meet this week. They don’t get the benefit of April’s numbers because they meet before the employment report is released. And yet they must decide whether to raise rates again at this meeting.

Most are predicting that the Fed will hold steady at this week’s meeting. Until last week, the stock market had cooled significantly since their last session, international tensions are higher and the inflation data released recently was decidedly tame. Of course, we can’t predict their decision, but the evidence supports this hunch. As we have pointed out in the past, the Fed controls short-term rates and if the Fed acts when the markets are not expecting it, volatility in the bond and stock markets can follow. It will be an interesting week.

The Weekly Market Update

Rates on 30-year fixed loans rose after falling to 2017 lows the previous week. For the week ending April 27, Freddie Mac announced that 30-year fixed rates rose to 4.03% from 3.97% the week before. The average for 15-year loans increased to 3.27%, and the average for five-year adjustables moved up to 3.12%. A year ago, 30-year fixed rates averaged 3.66%.

Attributed to Sean Becketti, chief economist, Freddie Mac -- "The 10-year Treasury yield rose about 10 basis points this week. The rate on 30-year fixed loans moved with Treasury yields, rising 6 basis points to 4.03 percent. Despite recent swings in rates, the housing market continues to show signs of strength—both existing and new home sales in March exceeded expectations, and the Case-Shiller Home Price Index posted another solid gain."

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.