U.S. Employers add 151,000 jobs in January – Unemployment rate drops to 4.9% – The Labor Department reported Friday that employers added 151,000 non-farm jobs in January. This was well below the 190,000 expected, which could signal slowing overseas has finally affected employer confidence. A robust 4th quarter of job growth in 2015 showed that employers’s confidence had not been affected by slowing overseas. Perhaps that is about to change is the feeling of some analysts. Others were encouraged by stronger growth in the manufacturing sector than expected and shrugged off the lower number as offsetting stronger than expected job growth over the last few months, and offsetting some temporary holiday seasonal jobs lost. We will see which analysts are right in the coming months.Hourly wages rose showing a 2.5% annual increase in January. This was the most positive part of the report. The unemployment rate also fell from 5% in December to 4.9% in January, its lowest level in 8 years.
Stocks sell off following U.S. jobs report – Stocks sold off on Friday following the announcement of a disappointing jobs report. The dollar also strengthened after falling earlier in the week. The strong dollar is a concern for companies that sell products overseas. Oil prices also dropped which had risen over the past two weeks. All in all not great news for investors, yet the drop over the past week was not very much. The Dow Jones Industrial Average closed Friday at 16,204.97, down from 16,466.30 last week. TheS&P 500 closed the week at 1,880.05, down from 1,940.24 last week. The NASDAQ closed Friday at 4,363.14, down from 4,613.95 last week.
Bond yields drop – The 10 year U.S. Treasury bond yield closed Friday at 1.84%, significantly lower than 1.94% last week. The 30 year U.S. Treasury bond yield closed Friday at 2.67%, down from 2.75% last week.
Mortgage rates at lowest levels in 2 years – Uncertainty has caused investors to move money into lower returning safer investments like U.S. treasury bonds and mortgage securities. At the same time central banks around the world have dropped rates. Our bond and mortgage security rates, while historically low, offer a decent return comparatively. This has continued to push rates lower. The 30 year fixed rates below loan amounts of 419,000 are around 3.625%. 30 year rates for loans above 419,000 are about 3.875%. The 15 year fixed was around 3.10%. The 5 year was around 2.625%.
The real estate market seems to be in full swing! I’m seeing more listings come out, but they are selling so quickly, if priced right, that our historically low inventory levels seem to be here to stay. That is driving prices up, yet not at the levels seen a couple of years ago. I’d expect most of the years price appreciation to occur in the next few months, and prices should level off in late summer as they did last year. Interest rates are at the lowest levels in a couple of years, which are close the lowest rates in decades. If you are buying, buy now! If you are not buying, you should! If you are going to move up, I’d do it now! If you haven’t been thinking of moving up, you should!
Have a great weekend!
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