Economic update for the week ending November 3, 2018
U.S. Employers added 250,000 new jobs in October - Wages grow at fastest pace in almost 10 years - Unemployment remains at lowest rate since 1969 - The Department of Labor Statistics reported Friday that 250,000 new jobs were added in October. That eclipsed the 190,000 new jobs analysts had expected. Job growth has now hit a record of 97 straight months. The unemployment rate was unchanged at 3.7%, the lowest national unemployment rate in 49 years. Average hourly wages were up 3.1% in October from last October. That was the largest year over gain in almost 10 years.
Stock markets were up about 2.5% for the week - As earnings reporting season for the third quarter began to come to a close, many companies reported profits this week that beat expectations. That was a welcome relief to investors who saw stocks fall in the previous two weeks as some companies reported disappointing results. The Dow Jones Industrial Average closed the week at 25,270.23, up from 24,688.31 last week. It is up 2.2% year to date. The S&P 500 closed the week at 2,723.06, up from 2,658.69 last week. It’s up 1.8% year to date. The NASDAQ closed the week at 7,356.99, up from 7,167.21 last week. It’s up 6.6% year to date.
Treasury Bond Yields sharply higher this week - The 10-year treasury bond closed the week yielding 3.22%, up from 3.08% last week. The 30-year treasury bond yield ended the week at 3.46%, up from 3.32% last week. We watch treasury bond yields because mortgage rates follow bond yields.
Mortgage rates were lower this week, but rates rose Friday after the October jobs report - The November 1, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.83% almost unchanged from 4.86% last week. The 15-year fixed was 4.23% down from 4.29% last week. The 5-year ARM was 4.04%, down from 4.14% last week. Unfortunately, rates began rising on Friday after the jobs report revealed the highest wage gains in almost 10 years.Experts feel that higher wages will lead to higher inflation. Next weeks rates will be quite a bit higher. The 30 year fixed will probably hit 5% next week.