By Jessica Shanahan, Premier Lending LLC adapted from the Shirmeyer Rate Market Report.
Mortgage interest rates improved this past week largely driven by today’s weaker than expected employment report for May. Non-Farm Payrolls were expected to increase by 158k; as reported, Non-Farm Payrolls increased by only 38k, the lowest level since September 2010. Private Jobs were expected to increase by 150k; as reported, Private Jobs increased by only 25k. As a result of the weak employment report it’s unlikely that the Fed will increase the Fed Funds rate at its June FOMC meeting. The unemployment rate fell to 4.7% but that was mainly due to people dropping out of the labor force. The labor participation rate fell 0.2% to 62.6%. Other data was mixed. Economic data stronger than expected included April Personal Spending, the May ISM Manufacturing Index, and the April U.S. Trade Balance. Economic data weaker than expected included the May Chicago Purchasing Managers Index, May Consumer Confidence, April Construction Spending, the May ISM Services Sector Index, and April Factory Orders.
The Dow Jones Industrial Average is currently at 17,747, down over 100 points on the week. The crude oil spot price is currently at $48.66 per barrel, down slightly on the week. The Dollar weakened versus the Yen and Euro on the week.
Next week look toward Wednesday’s JOLTS Job Openings Report, Thursday’s Jobless Claims, and Friday’s Consumer Sentiment Index and Treasury Budget as potential market moving events. Also, the Treasury auctions 3-Year Notes, 10-Year Notes, and 30-Year Bonds next week.
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