ISM Manufacturing Index: Manufacturing grew this month, but barely perceptibly. The index came in at 50.1. For context, 50 is breaking even. New orders are up two points to 52.9. One disappointment is there aren’t many backlog orders that would cause business owners to ramp up production. These remain in contraction at 42.5. The lack of orders to fill is starting to have an effect on employment in this sector. Jobs numbers are officially shrinking at 47.6. Exports are also still down at 47.5. Prices are in the tank at 39.0.
MBA Mortgage Applications: Mortgage applications are settling down to the point where they’re tied to rate changes as normal, after a few weeks of volatility following the TRID hoopla over new forms and timing restrictions. Both the purchase and refinance index were down 1.0% as the composite index fell 0.8% for the week. The average rate on a 30-year fixed mortgage was up three basis points to 4.01%.
International Trade: The trade deficit decreased $7.2 billion to $40.8 billion in September. In addition, the August trade gap was revised down to $48.0 billion and the goods gap came in at $60.3 billion in September, but it was partially offset by a $19.5 billion services surplus. Exports were up 1.6%, led by consumer goods, including jewelry and artwork. Exports of capital goods were also higher. Imports fell 1.8%, with crude oil leading the way.
Jobless Claims: Initial claims were up 16,000 last week, but they still remain low at 276,000. The four-week average is up 3,500 to 262,750. On the continuing claims side, they were up 17,000 to 2.163 million. Meanwhile, the four-week average is down 11,000 to 2.162 million.
Employment Situation: Nonfarm payrolls were up 271,000 this month. That’s 31,000 higher than the high end of consensus estimates. The Fed governors who are looking to raise short-term interest rates in December will definitely be able to point to this. The majority of the gain came from private employers, as they added 268,000 jobs in October. Professional and business services employers added 78,000 jobs, while trade and transportation was up 51,000. Retailers added 44,000 jobs to gear up for the holidays, and 31,000 jobs were added in construction. The trickle-down in jobs did not reach manufacturing, which was unchanged this month. However, workers in this sector saw their average hours increase to 40.7. The unemployment rate was also down one tenth to 5.0%. Wages were up 0.4% for the month. The average work week for all U.S. employees was 34.5 hours. The labor force participation rate was 62.4%.
Mortgage rates moved higher across the board this week.
30-year fixed-rate mortgages (FRMs) averaged 3.87% with an average 0.6 point for the week ending November 5, 2015, up from last week when they averaged 3.76%. A year ago at this time, 30-year FRMs averaged 4.02%.
15-year FRMs this week averaged 3.09% with an average 0.6 point, up from last week when they averaged 2.98%. A year ago at this time, 15-year FRMs averaged 3.21%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.96% this week with an average 0.4 point, up from last week when they averaged 2.89%. A year ago, 5-year ARMs averaged 2.97%.
1-year Treasury-indexed ARMs averaged 2.62% this week with an average 0.2 point, up from 2.54% last week. At this time last year, 1-year ARMs averaged 2.45%.
Stocks were mixed on Friday as the market digested a strong employment report that increases the likelihood the Federal Reserve will raise rates in December. While the market may not like the rate increase, traders do like a little more certainty, and that was reflected in a week of gains.
The Dow Jones Industrial Average closed the week up 46.90 points at 17,910.33 for a weekly gain of 1.40%. The S&P 500 pretty much held steady on Friday, going down 0.73 points to close at 2,099.20, up 0.95% for the week. The NASDAQ was up 19.38 points to 5,147.12 this was a 1.85% gain from last week.
The Week Ahead
Wednesday, November 11
Veterans Day: The stock and bond markets are open, but banks are closed. Quicken Loans would like to thank all those that have served our country. Thanks for keeping us safe and free.
Thursday, November 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.
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.
Friday, November 13
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in the prices received by domestic producers of goods and services.
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.
Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.
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