Friday – March 5, 2021
U.S. job growth surged in February with big gains seen in the ailing leisure and hospitality sectors of the economy. The Labor Department reports that Non-Farm Payrolls rose by 379,000 in February up from 166,000 in January which was revised from 49,000. This was well above expectations of 200,000. Private sector Non-Farm Payrolls soared by 465,000! Bars and restaurants added 286,000, hotel jobs were up 36,000 while amusement, recreation and gambling added 33,000. The pent-up demand in the leisure and hospitality sector should continue to show increases as more economies open. The Unemployment Rate slipped to 6.2%.
Gas prices at the pumps across the nation continue to rise as oil prices gush higher. Motor Club AAA reports that the national average price for a regular gallon of gasoline rose to $2.75 today, up from $2.45 a month ago. AAA says that rising crude prices, tightening gas supplies and increased gas demand have contributed to drivers seeing higher prices at the pump. A year ago the price was $2.40. The price of oil has risen from -$40.32/barrel back on April 20, 2020 to $66 currently. “Barring hurricane season, March may bring the most expensive pump prices of 2021,” said Jeanette Casselano McGee, AAA spokesperson. “While the month is roaring in like a lion, by the end of it we could see some relief at the pump as refineries resume normal operations, especially if crude oil prices show signs of stability.”
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Thursday – March 4, 2021
Home borrowing costs continued to rise this week but remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 3.02% from 2.97% with 0.6 in points and fees. A year ago at this time, the rate was not much higher at 3.29%. It is up from 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”
First-time unemployment claims remain stubbornly high but fell in the latest week while 10 million Americans are still without a job. Weekly Initial Jobless Claims rose 15,000 to 745,0000 for the week ended February 27, 2021. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,295,000 from 4,419,000. With more and more states reopening their economies, many unemployed Americans should be able to go back to work.
Courtesy of Mortgage Market Guide
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Wednesday – March 3, 2021
Mortgage rates jumped in the latest survey but still remain at historically low levels. The MBA reports that the 30-year fixed-rate mortgage rose 15 basis points to 3.23% with 0.48 in points for the week ended February 26, 2021. The Market Composite Index, a measure of total mortgage loan application volume, rose 0.5%, the Purchase Index increased 2% while the Refinance Index was unchanged. Spokesperson Joel Kan said, “The housing market is entering the busy spring buying season with strong demand.”
Private payroll growth eased in February as the sector continues to work through the lingering effects from COVID-19. ADP Private Payrolls rose by 117,000 in February while January was revised higher to 195,000 from 174,000. Estimates were calling for a gain of 180,000. “The labor market continues to post a sluggish recovery across the board,” said Nela Richardson, chief economist, ADP. The report precedes the more closely watched government Non-Farm Payrolls report, also for February, that will be released on Friday morning.
The service sector index slipped a bit in February but continues to expand. The ISM Service Index fell to 55.3 in February from 58.7 in January. A reading above 50 indicates expansion, below 50 contraction. It was the ninth straight month of expansion and has grown all but two of the last 133 months, those being April and May of 2020. The survey said that most respondents were optimistic about business recovery and the economy.
Courtesy of Mortgage Market Guide
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Tuesday – March 2, 2021
The housing market continues to be a beacon of light for the U.S. economy but prices are rising at a fast pace due in part to low inventories of homes for sale on the market. And when you throw in low borrowing costs, it’s a recipe for higher prices. CoreLogic reports that home prices, including distressed sales, rose 10% from January 2020 to January 2021, up 0.9% monthly from December 2020 to January 2021.
Looking ahead, it is expected that prices will rise 3.3% from January 2021 to January 2022. “Record-low mortgage rates were a significant driving force behind last year’s rebound in housing market activity. However, heavy competition for the few houses on the market drove home prices to historic highs,” said President and CEO, Frank Martell. The report went on to say that despite first-time buyers driving demand, entry level homes are in short supply.
Courtesy of Mortgage Market Guide
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Monday – March 1, 2021
Economic data continues to stream in on the positive side as the U.S. economy improves. The February national ISM Manufacturing Index rose to 60.8 from 58.7 in January and above the 58.8 expected. This figure indicates expansion in the overall economy for the ninth month in a row after a contraction in March, April, and May of 2020. All components within the index increased, including the employment index.
Positive news from the vaccine front. Johnson &Johnson started shipping out vaccines today with Americans set to receive the one-shot dose in the next few days. Virus cases and death rates are declining as COVID loosens its grip. The House passed its $1.9 trillion COVID stimulus package on Saturday and the bill now heads to the Senate where it could receive some push back. Recently, Johns Hopkins Dr. Markary is predicting herd immunity by April.
ADP Private Payrolls and the government’s Jobs Report for February will be released on Wednesday and Friday, respectively this week and will be closely watched after January’s weak numbers. Non-Farm Payrolls are expected to increase by 200,000 in February after just 49,000 jobs were created in January. The job market has improved but there still are millions of Americans without jobs.
Courtesy of Mortgage Market Guide
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