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Market Update - Quicken Loans Zing Blog

Headline News

Personal Income and Outlays: Incomes were up 0.3% in December, but that didn’t translate to more spending, which was flat for the month. Prices were down 0.1%, while the inflation level in core categories was unchanged for December. Prices are up 0.6% for the year and 1.4% annually in key categories. Digging a little deeper in the data, wages and salaries were up 0.2% for the month. Spending on both durable and nondurable goods fell 0.9%. Spending on services did move higher to offset that a bit.

ISM Manufacturing Index: Manufacturing numbers were unchanged in January, coming in at 48.2, still in contraction. This is the worst the number has been since 2009. Employment is shrinking, down 2.1 points to 45.9 in a bit of good news, new orders came in at 51.5. However, this is offset by the fact that manufacturers are not hiring to cut into their backlog. Backlogs are going down at 43.0. The steady decrease in the backlog has kept production up at 50.2.

MBA Mortgage Applications: Applications were down 2.6% last week with purchases falling 7.0% and refinances failing to make up the ground despite rising 0.3% the average rate on a conforming 30-year fixed loan was down five basis points to 3.97%.

Jobless Claims: Initial claims were up 8,000 last week to 285,000. The four-week average is up 2,000 to 284,750. Continuing claims fared a little better as they fell 18,000 to 2.255 million. However, the four-week average is up for the fourth week in a row, coming in 5,000 higher at 2.253 million.

Employment Situation: There were just 151,000 jobs added to nonfarm payrolls in January, coming in well below expectations. Revisions were also mixed, with 30,000 less jobs being added in December, but history being kinder to November with an additional 28,000 jobs added. Private payrolls added 158,000 jobs, while government payrolls actually dropped 7,000 workers. In a bit of good news, the unemployment rate did drop one-tenth of a percent to 4.9%, while labor force participation was equally up to 62.7%. Average hourly earnings were up 0.5% and the average work week with six minutes longer at 34.6 hours. In a bit of a contradiction to the manufacturing numbers released earlier in the week, payrolls in the sector were up 29,000 and hours were up. Retail also added 58,000 jobs, while transportation and warehousing were up 45,000. In negatives, education and health were up only 6,000 and hiring for temporary help was down 25,000.

International Trade: The trade deficit increased to $43.4 billion from $42.2 billion in November, a $1.2 billion December gain. Exports were down 0.3% to $181.5 billion. The civilian aircraft exports were down, along with those of industrial supplies and food and beverages. Imports were up 0.3% to 224.9 billion. More cars were imported in December as well as more industrial supplies. Imports of non-auto consumer goods were down, but not enough to offset things.

Mortgage News

Volatility in the markets caused mortgage rates to fall once again this week.

30-year fixed-rate mortgages (FRMs) averaged 3.72% with an average 0.6 point for the week ending February 4, 2016, down from last week when they averaged 3.79%. A year ago at this time, 30-year FRMs averaged 3.59%.

15-year FRMs this week averaged 3.01% with an average 0.5 point, down from 3.07% last week. A year ago at this time, 15-year FRMs averaged 2.92%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.85% this week with an average 0.4 point, down from last week when they averaged 2.90 %. A year ago, 5-year ARMs averaged 2.82%.

Stock Markets

Stocks were quite a bit lower on Friday as tech stocks were down following weak earnings and mixed employment data had some speculating that the Fed might raise rates again this year.

The Dow Jones Industrial Average was down 1.61% for the week after closing 211.75 points lower on Friday at 16,204.80. The S&P 500 was down 35.40 points Friday to close at 1,880.05. This was down 3.20% for the week. The NASDAQ was down 146.41 points Friday to close at 4,363.14, falling about 5.75% for the week.

The Week Ahead

Tuesday, February 9

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 that compares what people think their homes are worth with the opinions of appraisers. Closer homeowner perceptions 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, February 10

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, February 11

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed 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, February 12

Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are measured by retail and food services 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.

Not too many economic reports on tap next week, but we aren’t just mortgages and economics. Subscribe to the Zing Blog today for lots of tips to help you with your home, money and life.

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