Job growth surges in December 2018
312,000 new jobs were added. The Bureau of Labor Statistics reported that U.S. employers added 312,000 new jobs in December 2018. That shocked analysts that had forecasted 178,000 new jobs. There were 2.6 million jobs added in 2018, up from 2.2 million new jobs in 2017. The unemployment rate rose to 3.9% from 3.7% in November, a 50 year low, as 419,000 new workers entered the workforce. Optimism about finding acceptable jobs and higher wages were credited with expanding the workforce.
Wages rose 3.2% from one year earlier, matching October’s year-over-wage gains, which marked the largest year over year wage gain since April 2009.
Stocks closed higher for the second straight week – Stocks were down for the week before, surging on Friday following a stellar jobs report and positive comments from Federal Reserve Chief Jerome Powell to end the week higher. The jobs report calmed investors fears that a recession may be looming. Comments by Fed Chief Powell – that interest rate increases would be paused due to low inflation and slowing economies overseas – gave investors more good news.
Thursday, Apple lowered their profit estimates for 2019 based on slower sales. Asia and Europe reported slowing in economic growth, which dragged down stocks.
Friday, the Dow gained 750 points to end the week higher. The Dow Jones Industrial Average closed the week at 23,433.16, up 1.6% from 23,062.49 last week. The S&P 500 closed the week at 2,531.94, up 1.9% from 2,485.74 last week. The NASDAQ closed the week at 6,738.96, up 2.3% from 6,584.62 last week
Treasury Bond Yields were slightly lower. The 10-year Treasury Bond closed the week yielding 2.67%, down from 2.72% last week. The 30-year treasury bond yield ended the week at 2.98%, down from 3.04% last week. We watch treasury bond yields because mortgage rates follow bond yields.
Mortgage rates were at the lowest levels in 8 months. The January 3, 2019, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.51%, down from 4.55% last week. The 15-year fixed was 3.99%, down from 4.01% last week. The 5-year ARM was 3.98
The year-end email and postcards will be ready once final housing numbers are released. That should be around January 17th.
Here are some preliminary numbers we have so far:
2018 year-end economic update
• The Dow Jones Industrial Average ended 2108 at 23,327.46, down from 24,719.22 at the close of 2017.
• The S&P 500 closed the year at 2,506.85, down from 2,673.51 at the end of 2017.
• The NASDAQ closed at 6,635.28, down from 6,903.39 on December 31, 2017.
• U.S. Treasury Bond Yields higher in 2018
• The 10-year U.S. Treasury bond closed the year at a 2.69% yield, up from 2.40% December 31, 2017. The 30-year treasury yield ended the year at 3.02%, up from 2.74% on December 31, 2017.
Mortgage Rates were higher in 2018.
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