I hope everyone had a good Fourth of July! Because it was a midweek holiday, there wasn’t a ton on the calendar, but the economic reports we did see brought a bit of a boom.
It’s the week of the big jobs report, so let’s jump right in.
ISM Manufacturing Index
American manufacturers were fairly optimistic in June with the index coming in at 60.2, up 1.5 points on the day. Supplier delivery times actually increased, which pushes this index higher because it means there’s more manufacturing to do. However, consumers won’t be happy to hear it’s taking longer to make their products.
Production was up almost a full point to 62.3. Input costs were down slightly at a still-elevated 76.8. New orders came in at 63.5 and backlog orders were at 60.1.
Export orders weren’t feeling the effects of proposed tariffs yet, as these held at 56.3. Import orders were also up almost five points to 59.0. Employment was holding at a strong 56.0.
MBA Mortgage Applications
Overall applications were down 0.5% in the mortgage market last week. Purchases were up 1.0%, but it wasn’t enough to make up for the 2.0% drop in refinance applications.
Average 30-year fixed rates fell five basis points to 4.79%, according to this index. Purchase applications made up 62.8% of overall applications.
Initial jobless claims were up 3,000 to 231,000 last week. This moved the four-week average up slightly, rising 2,250 to 224,500.
Continuing claims, a measure of longer-term unemployment, were up 32,000 to 1.739 million, but the four-week average was actually down 2,000 to come in at a 45-year low at 1.718 million.
There were 213,000 jobs added to nonfarm payrolls in the month of June, beating expectations for a 190,000 increase. Unfortunately, the unemployment rate is also higher, jumping to 4.0% from 3.8%. On the plus side, more people are participating in the labor force, as this number has also risen 0.2% to 62.9%.
Average hourly earnings were up 0.2% in June and have risen 2.7% on the year. The average workweek remains 34 hours, 30 minutes.
There were 202,000 jobs added in the private sector, while the government kicked in 11,000 jobs. There were 36,000 jobs added in manufacturing, while construction added 13,000. Mining companies added 5,000 people to the payroll. Professional and business services companies added 50,000 jobs, including 9,000 temporary workers.
It wasn’t all rosy, with trade and transportation down. The retail sector also saw a 22,000 job decline.
The United States trade deficit for May came in at $43.1 billion, down $3 billion from April. The April deficit was also revised down by $100 million.
Exports were up 1.9% to come in at $215.3 billion, including 2.6% in the value of goods exported to come in at $144.9 billion. Exports of capital goods like aircraft were really strong, as were food exports. Meanwhile, services exports were up 0.6% to $70.4 billion.
The jump in exports outweighed a 0.4% increase in the number of imports to come in at $258.4 billion. Imports of goods were up 0.5% to $210.7 billion. Imports of services were down 0.1% to $47.7 billion.
It’s worth mentioning China in light of the ongoing tariff actions that both countries approved last week. China’s trade surplus with the U.S. in May was $33.2 billion and is at $152.2 billion year-to-date. This is up 13.5% from a year ago. This is going to be something that will be watched closely in the coming weeks and months to see how the trade dispute impacts these numbers.
After being on the rise for quite a while, mortgage rates have actually dropped in five of the last six weeks, according to Freddie Mac.
Given that rates are lower now after rising for most of the spring, it could be a good time to lock your rate to take advantage before they rise again.
The average rate on a 30-year fixed mortgage with 0.5 points in fees was down three basis points to come in at 4.52%. This is up from 3.96% at this time last year.
In shorter terms, the average rate on a 15-year fixed mortgage was 3.99% with 0.4 points, down five basis points on the week. At this time a year ago, the average rate was 3.22%.
Finally, the average 5-year treasury-indexed hybrid adjustable-rate mortgage (ARM) saw its rate fall 13 basis points on the week to 3.74% with 0.3 points. This has risen from 3.21% last year.
It ended up being a good week in the stock market. A strong jobs report outweighed trade fears when the United States and China imposed tariffs on each other after months of threats.
Tech stocks had a big week. Apple and Microsoft had big days Friday and healthcare was up. If you had shares of Facebook, it was a good day, with the stock rising to an all-time high. Looking for the next big stock that’s going to take off, but don’t have the money to invest yet? Go ahead and hone your skills and have some fun in our Fantasy Stock League!
The Dow Jones industrial average finished the week at 24,456.48, up 0.76% on the week and 99.74 points on the day. The S&P 500 was up 1.52% on the week after rising 23.21 points on the day to close at 2,759.82. Finally, the Nasdaq rose 101.96 points on the day to finish at 7,688.39, up 2.37% on the week.
The Week Ahead
Tuesday, July 10
Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s largest mortgage lender, releases data every month comparing what people think their homes are worth to 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 at both the national and regional levels. 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, July 11
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
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.
Thursday, July 12
Consumer Price Index (CPI) (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to report 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, July 13
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.
It’s a week of housing and inflation data. We’ll have it all covered in Market Update next week.
If mortgage rates and economic data are doing a really poor job of keeping you awake this Monday afternoon, we have plenty of home, money and lifestyle content we would love to share with you. You can get it twice weekly if you subscribe to the Zing Blog below.
Across the country, there’s been quite a heat wave hitting in the past few weeks. If you’re lucky enough to have a pool, you could really ingratiate yourself to your family, friends and the neighborhood by having a pool party. If you’ve been looking to throw a shindig of your own, here are some great tips to take your pool time to the next level. Have a great week!
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