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It’s Columbus Day; if you’ve got the day off, enjoy the rest of it. The show goes on here, but it’s going to be a good week!

It was a pretty good weekend. Both my teams won their football games. Hockey is a much slower start, but it’s a long season. Let’s see how the market and economic data performed last week compared to my favorite sports stars.

Headline News

ISM Manufacturing Index

Manufacturing growth slowed slightly in September with new orders failing to grow at the pace they had been previously. However, 59.8 still indicates growth and is on the strong side.

Despite being down more than three points, a reading of 61.8 for new orders is still pretty high. Meanwhile, export orders were also very good at 56. Backlog orders were down two points, which indicates factories aren’t as stressed trying to get orders pushed out, but at 55.7, it still indicates that further employment increases may be needed.

Production was also up 0.6 points to 63.9. There were increases in both costs and delivery delays on the downside. Costs increased to a level of 66.9. Manufacturers also weren’t building inventories for raw materials and finished goods as steeply as in previous months.

MBA Mortgage Applications

Overall applications were flat on the week as applications to purchase were up 0.1% and refinance applications fell by the same amount.

The average rate on a 30-year fixed conforming mortgage was down one basis point to come in at 4.96%. Most people in the market are still buying homes as opposed to refinancing, with purchase applications making up 60.6% of overall volume.

Jobless Claims

Initial jobless claims were down 8,000 last week to come in at 207,000. The four-week average moved up by 500 claims to match this 207,000 level.

As we continue to track the situation in the Carolinas post-Hurricane Florence, initial claims were up almost 1,000 in South Carolina to come in just below 4,800. Meanwhile, in North Carolina, the level of initial claims fell almost 5,000 to 5,300.

On the continuing claims side, the four-week average fell to a 45-year low at 1.665 million, as continuing claims were down 15,250. Continuing claims were down 13,000 last week to come in at 1.65 million.

Employment Situation

The U.S. economy added 134,000 jobs on nonfarm payrolls in September. This was well below consensus estimates, but the news wasn’t all bad. August levels were revised 69,000 higher to 270,000.

Turning back to September, the unemployment rate dropped 0.2% to come in at 3.7% while the participation rate in the labor force remained steady at 62.7%. Average hourly earnings were up 0.3% and have risen 2.8% on the year. While it’s not necessarily happening at a breakneck pace, wages are starting to go up. The average workweek remained at 34 hours, 30 minutes.

Looking at individual sectors, there were 121,000 jobs added to private payrolls, while the government kicked in the 13,000 new positions. There were 18,000 jobs added in manufacturing. There were 23,000 jobs added in construction, with 5,000 added in the mining sector. Trade and transportation added 8,000 jobs after being up 55,000 in August. Finally, 54,000 jobs were added in professional and business services, with 11,000 temporary jobs included in that number.

On the other side, retail saw 20,000 jobs cut in September. That’s a sector we’ll be keeping an eye on as we head into the holiday hiring season.

International Trade

The nation’s trade deficit rose $3.2 billion to come in at $53.2 billion in August. The deficit is moving down deeper at a faster pace, which is in a good sign for net exports in the third quarter report for GDP.

Exports were down 0.8% in August after being down 1% in July. Services exports were up 0.3% to $70.5 billion. However, goods exports were down 1.4% to $138.9 billion and follows a 1.6% downturn in July. Exports of agricultural products were down $1.2 billion to $12 billion, while industrial supplies fell $2.4 billion to $44.1 billion.

Looking at imports, these were up 0.6%. Vehicles were up $1 billion to $31.7 billion, and consumer goods imports were up $900 million to $53.5 billion.

Mortgage Rates

Mortgage rates remained pretty flat last week, according to Freddie Mac’s latest survey data. However, because the data for this particular survey is collected Monday through Wednesday in preparation for Thursday release, things are a little bit deceiving this time around.

Beginning Wednesday with the release of an important precursor to the employment report released on the first Friday of every month, money moved out of the bond markets and into stocks. Because mortgage-backed securities are traded in the bond market, mortgage rates moved higher, beginning with the release of an employment report from private payroll company ADP showing more jobs added to payrolls than analysts had expected. From there, investors steadily left bonds and moved into stocks through the end of the week.

What’s the bottom line if you’re in the market for a mortgage? Rates are in a period of steady uptick. Whether you’re looking to purchase or maybe take cash out of an existing home, it’s not a bad idea to lock your rate at this point.

In the aforementioned Freddie Mac data, the average mortgage rate was down a single basis point last week to come in at 4.71% with 0.4 points in fees. This is up from 3.85% at the same time a year ago.

Meanwhile, looking at shorter terms, the average rate on a 15-year fixed rate mortgage with 0.4 points was down one basis point to 4.15%, up from 3.15% last year.

Finally, the average rate on a 5-year treasury-indexed, hybrid adjustable rate mortgage (ARM) with 0.3 points was up four basis points to 4.01%. This is up from 3.18% last year.

Stock Market

Stocks fell Friday. Mixed jobs report data failed to please the market when the number of jobs added came in well below expectations. The S&P 500 had its worst week in almost a month.

If you’re in our Fantasy Stock League, it likely wasn’t a great week for your portfolio, but today’s a new day. Remember, there are prizes for the best portfolio in terms of percentage gains every other month and a grand prize for the best performing portfolio at the end of the year. Get in on the action!

The Dow Jones industrial average fell 180.43 points to 26,447.05, falling 0.04% on the week. The S&P 500 was down 0.97% on the week after falling 16.04 points on Friday to close at 2,885.57. Finally, the Nasdaq closed at 7,788.45, down a precipitous 3.21% on the week after falling 91.06 points on the day.

The Week Ahead

Monday, October 8

It’s Columbus Day. While banks and the bond market are closed, the stock market is open.

Tuesday, October 9

Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans 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, October 10

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, October 11

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, October 12

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.

We get some key inflation data as well as a look at home prices this coming week. We’ll have a recap of it all next Monday in Market Update.

I’m looking out the window right now and an autumn fog has descended on the Detroit area. If all this economic data and market analysis has you struggling to come out of the fog this afternoon, the Zing Blog has plenty of home, money and lifestyle content to give you the jolt you need to start your week. October means it’s time to start looking at Halloween costumes. We’ve got a new post that’ll help you out whether you’re trying to dress up your little ghosts and goblins or do something that will positively give adults a fright. Have a spooky good week!

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