Reports regarding employment were abundant over the past week. While the headline-grabbing unemployment rate increased to 5.5%, economists and traders embraced this as a positive sign that the labor market continues to improve. Expectations were for the unemployment rate to hold steady at 5.4%, but an increased labor force participation rate resulted in the 0.1% increase. Gallup reported that 66.8% of adults in the U.S. participated in the workforce in May, while the U.S. Bureau of Labor Statistics reported the participation rate to be 62.9%.
Another sign of positive momentum in the employment sector was news that the economy added 280,000 jobs in May, well above the 225,000 expected. March and April figures were also revised higher by 32,000. Average hourly earnings for all employees increased by 8 cents to $24.96 which is a 2.3% increase year-over-year.
May brought fewer layoffs than in previous months with a layoff count of 41,034, down from 61,582 in April. May’s layoff count is also significantly down from the 52,961 layoffs in May 2014. Most layoffs came from the financial and government sectors, as JP Morgan announced they cut 5,000 jobs, and Massachusetts cut 4,500 jobs.
Jobless claims continue to be notably low, with a decrease of 8,000 in the week of May 30 to a 276,000 level. The 4-week average increased slightly to 274,750 claims, but is still running approximately 5,000 lower than a month ago. All jobless claim levels are at or near 15-year lows.
The Bloomberg Consumer Comfort Index is displaying downward momentum, although the numbers are still considered solid. Consumer comfort came in at 40.5 for the week of May 31, down 0.4% from the previous week. Although there is strength in the jobs market, there are still signs of uncertainty among consumers.
Construction spending is showing improvement, with a 2.2% gain in April, placing it well above the high-end forecast of 1.6%. Residential construction spending rose 0.6%, with notable gains for both single-family and multi-family homes. Private, non-residential spending displayed improvements for the power and office sectors. Public spending displayed strong gains as well, especially for educational building.
National mortgage rates continue to be among the highest seen thus far in 2015. According to Freddie Mac’s Primary Mortgage Market Survey released on June 4, the 30-year fixed average mortgage averaged 3.87% for the second straight week, while the 15-year fixed decreased slightly from 3.11% on May 28 to 3.08% on June 4. These rates continue to come in below those from this time last year, when the 30-year fixed averaged 4.14% and the 15-year fixed averaged 3.23%.
Local mortgage rates rose across the board over the past week, with increases of near 1/8 percentage points in most loan programs. The 30-year fixed went entered into the 4.00% range for the first time since mid-December with a rate of 4.00% (4.040% APR) on June 3. Visit out Mortgage Rate Update page for more in-depth information on current rates.
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