Last week was an eventful one, as economic indicators from March and April gave mixed messages about the economy. Among the positives – manufacturing, falling oil prices, household spending and income, and certain employment reports. Among the negatives – factory orders, home ownership, and certain employment reports.
Unemployment picture in flux, housing mixed
Overall, the employment picture is still positive but moving down from its peak pace. In March, the unemployment rate was revised down to 8.1 percent (from 8.2 percent) and upward revisions brought new hires up to 154,000. April saw just 115,000 jobs created, which came in below the projected number of 165,000. According to the ADP employment report, small and medium-sized businesses made just 116,000 new hires in April, down from 181,000 in March. You won’t find Central Coast Lending in that statistic. CCL is pleased to welcome Bob Moss and Ryan Baker to its team.
This is something we don’t tend to think about as much, but globally, job growth also continues to struggle. Fifty million jobs have vanished since 2008-2009, and there are now 202 million unemployed internationally. Europe’s rampant debt issues and the resulting austerity measures have contributed to the difficulties.
According to the Census Bureau, the rate of home ownership is at its lowest since 1997. After a one percent decline in the first quarter of 2012, 65.4 percent of Americans own a home.
Oil prices down, manufacturing improves, Dow hits four-year high
On Friday, oil prices fell four percent to below $100 a barrel. The fall came after reports showed that the global economy is weakening, thus (possibly) reducing demand for oil. Other reasons for the price drop could be increased supply, and easing political tensions. Some analysts said that they expected prices could fall to $3.50 a gallon by the 4th of July.
Even while jobs and real estate have struggled, the manufacturing sector has shown strength. The Institute for Supply Management reported that new orders, production and hiring all rose in April. The index is at its highest level of expansion in 10 months (54.8). In response, the Dow settled at its highest level in four years before retreating slightly later in the week.
Interest rates have dropped 1 percent in APR since March
Since the end of March, interest rates have dropped significantly. Closing costs have dropped by as many as 1.5 points, which accounts for thousands in closing costs. This week, the 30-year fixed fell another 1/8 point (3.500 percent, 3.582 percent APR) and the 15-year fixed continued its ascent to new record lows (2.750 percent, 2.917 percent). You can see a rundown of rate movements this week HERE.
As always, keep checking in with us throughout the week on our website. We will be churning out updates on our Market News blog, as well as on our Home Maintenance blog. Last week, we had an interesting piece by Claudia Harmon Worthen about keeping your air clean with certain plants.