Early in the week we get some manufacturing numbers, but all eyes were on Friday’s employment report. Let’s see how everything turned out.
ISM Manufacturing Index: Manufacturing was stronger in September as this index of the industry was up 2.1 points to 51.5. New orders were especially good, up six points to 55.1. Export orders came in at an even 52. Meanwhile, backlog orders were also up four points to 49.5. If backlog orders start rising, it would be a good sign for hiring. Production was up 1.4 points to 52.8 and employment rose so that it’s nearly out of contraction at the moment. If things keep improving, more people may be hired in the manufacturing sector soon.
MBA Mortgage Applications: Applications were up 2.9% overall with purchase applications dropping just 0.1%. Refinances were up 5.0% as the average rate on a 30-year fixed loan was down four basis points to 3.62%.
International Trade: The U.S. trade deficit increased by $1.2 billion in August to $40.7 billion. However, exports of capital goods actually rose to $37.6 billion with aircraft taken out while imports were up $1.2 billion to $50.2 billion. Exports were up 0.8% with imports rising 1.2% overall. Despite the widening of the trade gap, it is a good sign for domestic demand. It is worth noting that exports were down $700 million when aircraft were included.
Jobless Claims: Initial claims were down 5,000 to come in at 249,000 last week. The four-week average was down 2,500 at 253,500. Meanwhile, continuing claims fell 6,000 to 2.058 million. The four-week average came in at 2.095 million, down 21,000 from the previous week.
Employment Situation: There were 156,000 jobs added to nonfarm payrolls in September. This came in below the 168,000 jobs expected. The unemployment rate was also 0.1% higher to 5.0%. That’s a little deceptive because the number of people looking for jobs also increased with the labor force participation rate being up 0.1% to 62.9%. Average hourly earnings were also up 0.2% and the length of the average American workweek increased by six minutes in September to 34.4 hours. August also came in higher in revisions, up 16,000 to 167,000. Turning to industry-specific numbers, there were gains of 23,000 for construction and 22,000 jobs for retail. Professional and business services had a huge month adding 67,000 jobs. Manufacturing continues to be on the weak side, losing 13,000 jobs. Government payrolls were down 11,000.
Rates were either unchanged or down last week. It remains a great time to lock in your rate.
30-year fixed-rate mortgages (FRMs) averaged 3.42% with an average 0.5 point for the week ending October 6, 2016, unchanged from last week. A year ago at this time, 30-year FRMs averaged 3.76%.
15-year FRMs this week averaged 2.72% with an average 0.5 point, unchanged from last week. A year ago at this time, 15-year FRMs averaged 2.99%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.80% this week with an average 0.4 point, down from last week when they averaged 2.81%. A year ago, 5-year ARMs averaged 2.88%.
Stocks were lower on Friday with the market taking in a weaker-than-expected jobs report and seeing falling oil prices. Meanwhile, economic speculation places the chances of a short-term interest rate and take at more than 60% in December.
The Dow Jones Industrial Average was down 28.01 points Friday to close at 18,240.49. This was down 0.37% for the week. The S&P 500 finished at 2,153.74, down 7.03 points for the day and falling 0.67% since last Friday. The NASDAQ matched the Dow’s 0.37% weekly decline after falling 14.45 points to end the week at 5,292.41.
The Week Ahead
Tuesday, October 11
Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month comparing what people think their homes are worth through appraisals. Similar opinions of value often make for smoother purchase and refinance transactions.
Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, both on the national and regional level. Homeowners can gain a perception of whether values are increasing or decreasing, and get a better idea of where they stand in terms of equity.
Wednesday, October 12
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, October 13
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, October 14
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers for the sale of goods and services.
Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.
Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
Things are slowing down until the end of the week. We do have plenty of home, money and lifestyle content to keep you going throughout the week. Subscribe to the Zing Blog below.
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