Fewer new jobs created in May, though unemployment remains at 50 year low
The Bureau of Labor Statistics reported that 75,000 new jobs were created in May. That was well below analysts’ expectations of 175,000 new jobs. The unemployment rate held steady at 3.6%, a 50-year low. Average hourly wages were up 3.1% from one year ago.
Stocks open June with best weekly gain in six months
This week negative news had positive results. Stocks had their worst May since 2010 after a trade deal with China collapsed, and President Trump announced last Friday that he would place tariffs on Mexico beginning June 10. Stocks dropped because investors felt that trade wars would slow the economy.
This week news spread that investors felt that the Federal Reserve was considering dropping rates in order to offset any slowing caused by tariffs, and stocks rallied. On Friday, a disappointing jobs report was actually followed by a jump in stock prices, as it is believed that a slowdown in job creation puts even more pressure on the Fed to drop rates.
On a positive note, President Trump announced Friday that he was suspending indefinitely the tariffs on Mexico that he announced just last Friday to begin on Monday.
The Dow Jones Industrial Average closed the week at 25,983.94, up 4.7% from 24,815.04 last week. It’s up 11.4% year-to-date.
The S&P 500 closed the week at 2,873.34, up 4.4% from 2,752.06 last week. It is up 14.6% year-to-date.
The NASDAQ closed the week at 7,742.10, up 3.9% from 7,453.15 last week. The NASDAQ is up 16.7% year-to-date.
Treasury bond yields at lowest levels in 24 months
The 10-year treasury bond closed the week yielding 2.09%, down from 2.14% last week. The 30-year treasury bond yield ended the week at 2.57%, unchanged from 2.58% last week. We watch treasury bond yields because mortgage rates follow bond yields.
Mortgage rates dropped to lowest levels in almost 2 years
The June 6, 2019, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.82%,
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