Economic Update for The Week Ending October 6, 2018

U.S. Economy adds 134,000 new jobs in September – Unemployment rate dropped to the lowest level since 1969 – The Department of Labor Statistics reported that U. S. employers added 134,000 new jobs in September. That was below the 185,000 that analysts had estimated, yet even though job creation fell to its lowest level in a year, the unemployment rate dropped to its lowest level in 49 years. The national unemployment rate in September was 3.7%, down from 3.9% in August. Average hourly wages rose 2.8% year-over-year from last September. That was slightly lower than last month when average hourly wages increased 2.9% from last August.

The Dow Jones Industrial Average closed the week at 26,447.05, down from 26,458.31 last week. It is up 7% year-to-date. The S&P 500 closed the week at 2,885.57, down from 2,913.98 last week. It’s up 9% year-to-date. The NASDAQ closed the week at 7,788.45, down from 8,046.35 last week. It’s up 16% year-to-date.

Treasury Bond Yields sharply higher than last week – The 10-year Treasury bond closed the week yielding 3.23%, up from 3.04% last week. The 30-year Treasury bond yield ended the week at 3.40%, up from 3.19% last week. We watch treasury bond yields because mortgage rates follow bond yields.

Mortgage rates higher at the end of the week – The October 4, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.71%, almost unchanged from 4.72% last week. The 15-year fixed was 4.15%, almost unchanged from 4.16% last week. The 5-year ARM was 4.01%, up from 3.97% last week. Although mortgage rates on Thursday’s survey were unchanged from last week’s rates they did rise in the end of the week. Next week’s survey rates will be higher.