Economic update for the week ending March 11, 2017

U.S. Employers add 235,000 jobs in February – The Labor Department reported that 235,000 new jobs were added in February. Experts had expected a gain of 190,000. The unemployment rate dropped to 4.7% down from 4.8% in January. The labor participation rate, which shows the share of working-age people in the workplace, increased to 63% from 62.9% last month. Wages in January grew 2.8% from last February, according to the report.

California unemployment rate drops to 5.1% – The California Employment Development Department reported that California’s unemployment rate dropped to 5.2% in January. The L.A. County unemployment rate also dropped in January to 5%, down from 5.6% in January 2015. Unlike federal jobs numbers, state unemployment numbers lag a month behind.

Stocks decline slightly after 6 weeks of gains – Stocks lost a little ground this week after 6 straight weeks of gains. Speculation of a rate hike by the Federal Reserve next week let to investor’s reluctance in a lackluster week. Energy stocks also declined as oil prices fell after months of gains. Even a better than expected new jobs report didn’t help stocks. Perhaps it even made investors even more apprehensive of a Fed rate hike. The Dow Jones Industrial Average closed the week at 20,908.72, down from last week’s close of 21,005.71. The S&P 500 ended the week at 2,372.60, down from its close of 2,383.12 last week. The NASDAQ closed the week at 5,861.73, down slightly from last week’s close of 5,870.75.

U.S. Treasury Bond yields rise on expectations of a Fed rate hike at next week’s Fed meeting – The 10-year U.S. Treasury Bond closed the week yielding 2.58%, up from 2.49% last Friday. The 30-year Treasury Bond yield closed the week at 3.16%, up from 3.08% last week. Mortgage rates follow bond yields, so we watch treasury bonds closely.

Mortgage rates rise on anticipation of Fed rate hike – The Freddie Mac Primary Mortgage Survey released on March 9, 2017 reported that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.21%, up from 4.10% last week. The 15-year fixed average rate was 3.42%, up fro. 3.32% last week. The 5/1 ARM average rate was 3.23%, up from 3.14% last week. Rates rose at the end of the week. Next week’s rates will be at least 1/8% higher.

Have a great weekend!