September jobs report - Unemployment rate drops to a 50-year low - The Labor Department reported that 136,000 new jobs were added in September. While that was slightly lower than the 147,000 new jobs that analysts expected, the unemployment rate dropped to 3.5%, a 50 year low. Year to date U.S. employers have added an average of 161,000 new jobs a month over the first 9 months, down from a monthly average of 223,000 new jobs added in 2018. Wage growth moderated. Average hourly wages grew 2.9% year over year from last September, down from a 3.2% year over year increase in August.
Stocks dropped for a third consecutive week - Stocks declined after a disappointing manufacturing report revealed that manufacturing activity dropped more than expected in September. That marked the second month in a row that manufacturing constricted as manufacturers have cut output on fears that tariffs will lower sales. A positive jobs report was released on Friday. News that the unemployment rate was at a 50-year low rallied the markets to make up much of the losses earlier in the week. Dow Jones Industrial Average closed the week at 26,573.73, down 0.9% from 26,820.25 last week. It is up 13.9% year to date. The S&P 500 closed the week at 2,952.79 down 0.3% from 2,961.79 last week. It is up 17.8% year to date. The NASDAQ closed the week at 7,982.47, up 0.5% from 7,936.63 last week. The NASDAQ is up 20.3% year to date.
U.S. treasury bond yields lower for the week - The 10-year treasury bond closed the week yielding 1.52%, down from 1.69% last week. The 30-year treasury bond yield ended the week at 2.01%, down from 2.13% last week. We watch treasury bond yields because mortgage rates often follow bond yields.
Mortgage rates unchanged this week - The October 3, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.65%, unchanged from 3.64% last week. The 15-year fixed was 3.14%, almost unchanged from 3.16% last week. The 5-year ARM was 3.38%, unchanged from 3.38% last week.