U.S. Job growth in March at 15 month low – The Labor Department reported that 126,000 new jobs were added in March. This disappointing number was about 1/2 of what analysts expected. Experts blamed the plunge in oil prices, the difficult winter, and the strong dollar for the slowdown in hiring. Energy and mining, which is heavily involved in fracking, lost 11,000 jobs in March and over 30,000 jobs so far this year. Manufacturing also declined for the first time in 20 months, a sign that employers are worried about sluggish exports due to a strong dollar making our goods more expensive overseas. The harsh winter also caused a reduction in hiring. The unemployment level remained unchanged at 5.5%, its lowest level since May 2008. The positive part of the report was that average hourly earnings for all private sector workers increased by 7 cents an hour. For the first quarter hourly wages are up at an annual rate of 2.8%.
Treasury Bond yields fall following jobs report – The 10 year Treasury bond closed the week at 1.85%, down from 1.95% last week. The 30 year treasury yield ended the week at 2.49%. It was 2.53% last Friday.
Mortgage Rates remain stable for second week – The 30 year fixed rates are around 3.75% for loans up to $417,000 and about 4.0% for loans over $417,000. 15 year fixed loans are about 3% for loans up to $417,000 and about 3.25% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.70%, about the same as 3.69% last week. The 15 year fixed was 2.98% pretty much unchanged from last week’s 2.97%. The 5 year ARM was 2.92% and the 1 year ARM was 2.46%.
Stocks almost unchanged for the week – Markets were closed Friday for Good Friday so we did not see the impact of the disappointing jobs report on stocks. There are two schools of thought. First, does this report mean that the economy is beginning to slow? Second, will this cause the Fed to back off on interest rate hikes? Certainly nobody wants the economy to slow, but at the same time the markets have feared an interest rate hike by the fed. This report may cause the Fed to leave their benchmark Federal Funds rate at or near zero for a longer period. The Dow Jones Industrial Average closed the week at 17,763.24, up slightly from last week’s close of 17,712.66. The S&P 500 closed at 2,066.96, almost unchanged from last week’s 2,061.02. The NASDAQ closed at 4,886.94, slightly below last week’s close of 4,891.22.
California’s unemployment rate falls to lowest level in 7 years – The state’s unemployment rate in February dropped to 6.7%, down from 6.9% in January. The state’s unemployment rate was 8% last February. March won’t be released until the end of April. It will be interesting to see if the March numbers are much lower than the February numbers statewide, as compared to the national numbers for the same time period.
I hope you are having a good weekend!
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