Economic update for the week ending April 6, 2018

March job gains below expectations The Department of Labor Statics reported that the U.S. economy added 103,100 new jobs in March. That fell well below analysts’ expectations of 193,000 new jobs. To be fair, February’s gains of 313,000 new jobs was over 100,000 more jobs than analysts had expected in February, so year-to-date we are over the number expected with an average of 201,000 new jobs monthly. March marked the 90th straight month of job gains. Unemployment remained unchanged for the sixth consecucitive month at 4.1%, the lowest rate since 2000. The unemployment rate has dropped from it’s peak of 10% in 2009. Wages, the most highly anticipated part of the report, grew 2.7% from last March. That was above the 2.6% year-over-year wage gains reported in February, and below the 2.9% year-over-year increase in January.

U.S. Stocks fall in turbulent week – It was another volatile week for stocks with huge daily swings. The week started with stocks down after China announced about $3 billion in tarriffs on U.S. goods. Later in the week, The Trump administration responded with proposed tarriffs of $50 billion on 1,300 Chinese products. China responded with $50 billion of tarriffs on U.S. airplanes, aerospace, and agriculture products. It should be noted that none of these tarriffs have actually been put in place. The markets have shifted day to day as investors weighed whether there will actually be a trade war, or if both sides are just posturing, as negotiations are ongoing. The March jobs report had very little effect on the markets. While new jobs were fewer than expected in March, job gains have still averaged a healthy 201,000 a month in 2018. Wage gains were in line with expectations.

The Dow Jones Industrial Average closed the week at 23,932.76, down from last week’s close of 24,103.11. It is down 3.2% year-to-date. The S&P 500 closed the week at 2,604.47, down from 2,649.87 last week. It’s down 2.6% year-to-date. The NASDAQ closed at 6,915.11, down from 7,063,44 last week. It is up 0.2% year-to-date.

Treasury Bond yields slightly higher this week – The 10-year treasury bond closed the week yielding 2.77%, up from 2.74% last week. The 30-year treasury bond yield ended the week at 3.01%, up from 2.97% last week.

Mortgage Rates slightly lower this week – The April 6, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.40%, down from last week’s 4.44% The 15-year fixed was 3.87%, down from 3.90% last week. The 5-year ARM was 3.62%, down from 3.66% last week. Rates were slightly lower on Friday.

Have a great weekend!

Syd