Economic update for the week ending March 4, 2016

U.S. Employers add 242,000 jobs in February – The Labor Department reported that U.S. Employers added 242,000 new jobs in February. This was far better than the 190,000 new jobs economists surveyed had predicted. It was also viewed as a very positive sign after a disappointing 172,000 jobs added in January. It was feared after the low January report that job growth could be stalling, but the February number of 242,0000 net new jobs put the 2016 average job gains numbers back to over 200,000 per month. The national unemployment rate held steady at 4.9%, the lowest level since February 2008. Wage growth was disappointing showing hourly wages up just 2.2% from last February. Wages were looking like they were beginning to rise over the last few months, after being stagnant for years, so this was a disappointing number. The Federal Reserve has a wage growth target of 3.5%.

California Unemployment Rate drops to 5.7% in January – The Employment Development Department reported that California’s unemployment rate slipped in January to 5.7%, down from 5.9% in December. Year over year non farm payrolls increased by 444,900 from last January when the state’s unemployment rate was 6.8%.

Stock markets rise for third straight week – Stocks rose again this week as rising oil prices bolstered energy stocks, and the outlook of economics in oil producing regions. Oil prices have risen 30% from their February lows. A strong jobs report showed that U.S. Employers’s are still confident and expanding, which also helped stocks on Friday after the report was released. The Dow Jones Industrial Average closed the week at 17,006.77 up from 16,391.99 last week. The S&P 500 closed the week at 1,999.99 up from 1,948.05 last week. The NASDAQ closed Friday at 4,717.02 up from 4,590.47 last week.

Bond yields – Bond yields have risen slightly since hitting historically low levels in mid February. It’s not unusual for bond yields to rise as stocks rise as investors sell bonds to buy stocks. The 10 year U.S. Treasury bond yield closed Friday at 1.88% from 1.76% last week. The 30 year U.S. Treasury bond yield closed Friday at 2.70% from 2.63% last week.

Mortgage rates -The Freddie Mac Primary Mortgage Survey showed that average rates on February 25, 2016 were as follows: The 30 year fixed average rate was 3.64%. The 15 year fixed average rate was 2.94%. The 5/1 ARM average was was 2.84%.

Have a great weekend!