Despite a wide range of major economic news, it was a very quiet week for mortgage rates last week. The key labor market report, the inflation data, and the Fed meeting caused a little reaction. Mortgage rates ended last week nearly unchanged.
The economy added 164,000 jobs in April, below the consensus for an increase of 190,000. However upward revisions added 30,000 jobs to the results for prior months, bringing the gains very close to the expected levels, the unemployment rate declined from 4.1% to 3.9% below the consensus of 4.0%, and the lowest level since December 2000.
There are two factors which influence the unemployment rate, and the decline was mostly due to workers leaving the labor force rather than job gains, so it was not viewed as a sign of strength.
Average hourly earnings, an indicator of wage growth, fell slightly short of expectations. They were 2.6% higher than a year ago, the same annual rate of increase as last month.
Overall, the modest weakness in wage growth tilted investors to view the report as little weaker than expected.
Major Economic news due This Week
Looking ahead, it will be a light week for economic data. The JOLTS report, which measures job openings and labor turnover rates, will come out on Wednesday. The Consumer Price Index (CPI) will come out on Thursday, CPI is a widely followed monthly inflation report that looks at the price change for goods and services. In addition, there will be treasury auctions tomorrow, Wednesday and Thursday.
Good News on Mortgage Limits
Effective immediately, loan amounts of all FNMA and FHA guaranteed loans are $625,500 (for high-cost areas). This is the news that we have all been looking forward to. Rates are under 5% for most fixed-rate mortgages.
By Mark Cohen
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