Economic update for the week ending August 8, 2020

The U.S. Economy added 1.76 million jobs in July – The Department of Labor Statisticsreported that 1.76 million jobs were added in July. Although this exceeded expert’ expectations, it marked a dramatic decline from the pace of new and rehired workers in May and June when 7.5 million jobs were added in two months. This added some concern that the rising Coronavirus may be stalling the jobs’ recovery. The unemployment rate fell to 10.2% in July from 11.1% in June. In the past three months 9.3 million workers were either rehired or found new jobs. There are still 12.9 million more unemployed workers than there were in February when the unemployment rate was 3.5%.

Stock Markets rose sharply again this week – Investors were encouraged this week as second-quarter corporate earnings as well as other economic data continued to beat expectations. Reports from China and Europe also showed their economies were improving as well. The scope of the next round of stimulus, expected to be in the $2-3 trillion range, has alleviated most investors’ fears. The NASDAQ hit another record high this week. This has left people scratching their heads wondering, “How in the world can the stock markets be performing so well when the world is still partially shut down?” Experts point to nearly $7 trillion in stimulus by the time this is over as the reason for this. The Dow Jones Industrial Average closed the week at 27,433.48, up 3.8% from 26,428.32 last week. It’s down 3.9% year-to-date. The S&P 500 closed the week at 3,351.28, up 2.5% from 3,271.12 last week. It’s up 3.7% year-to-date. The NASDAQ closed the week at 11,010.94, up 2.5% from 10,725.57 last week. It’s up 22.7% year-to-date.

U.S. Treasury Bond Yields – The 10-year treasury bond closed the week yielding 0.57%, almost unchanged from 0.55% last week. The 30-year treasury bond yield ended the week at 1.23%, up slightly from 1.20% last week.

Mortgage Rates – The August 6, 2020 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.88%, down from 2.99% last week. The 15-year fixed was 2.44%, down from 2.51% last week. The 5-year ARM was 2.90% down from 2.94% last week.