Economic update for the week ending December 8, 2018
U.S. employers added 155,000 new jobs in November - Unemployment remains at 3.7% - The Department of Labor Statistics reported yesterday that 155,000 new jobs were added in November. That did not meet experts expectations of 195,000 new jobs, but it was a solid number which indicates that employers are still confident in the economy. The unemployment rate held steady at 3.7%, the lowest rate since 1969. Wages grew 3.1% from last November’s average hourly rate. That matched last months year over year increase, which was the swiftest wage gain pace since 2009.
Stocks give up all of last week’s gains and are now in negative territory for the year - Trade tensions, fears of higher interest rates, lower oil prices, and fears of a slowing economy weighed heavy on investors this week causing stocks to stop over 4%. The positive was that as stocks dropped long term interest rates dropped as investors fled to the safety of treasury bonds. This brought home mortgage rates down to the lowest level in three months. The Dow Jones Industrial Average closed the weekat 24,338.94, down sharply from 25,538.46 last week. It was down 4.5% for the week and is now down 1.3% year to date. The S&P 500 closed the week at 2,633.08, down from 2,760.17 last week. It was down 4.6% for the week and is down 1.5% year to date. The NASDAQ closed the week at 6,969.25, down from 7,330.54 last week. It was down 4.9% for the week and up 1% year to date.
Treasury Bond Yields lower this week - The 10-year treasury bond closed the week yielding 2.85%, down from 3.01% last week. The 30-year treasury bond yield ended the week at 3.14%, down from 3.30% last week. We watch treasury bond yields because mortgage rates follow bond yields.
Mortgage rates lower for the week - The December 6, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.75%, down from 4.81% last week. The 15-year fixed was 4.21%, down from 4.25% last week. The 5-year ARM was 4.07%, down from 4.12% last week. Rates ended the week even lower.