Job Gains Fall Short

This past week saw job gains fall short, in spite of a wide range of news. Investors reacted to major economic data, COVID-19 headlines, and negotiations in Congress for an additional aid package.

However, it was a relatively quiet week for mortgage markets. Mortgage rates remained near record-low levels.

Job Gains Fall Short Despite Rebound

Despite unprecedented job losses, the economic rebound has continued. However, Friday’s latest data release fell short of expectations. In November, the economy gained 245,000 jobs, below the consensus forecast of 450,000.

The transportation, professional services, and health care industries saw renewed economic strength. At this point, the economy recovered over half of the 22 million jobs lost in March and April.

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Other Economic News

The other major areas of the report contained more optimistic news. From a level of 6.9% last month, the unemployment rate fell to 6.7%. This number matched expectations.

Average hourly earnings, an indicator of wage growth, rose 0.3% from October. This is above the consensus for an increase of 0.1%. It was also an impressive 4.4% higher than a year ago.

The Institute of Supply Management’s (ISM) national manufacturing index was in line with expectations. In November, the Institute of Supply Management came in at 57.5. This was the sixth straight month of readings above 50. Overall, this means that the sector is expanding.

Since many consumers are spending less money on travel and leisure activities due to the pandemic, they are buying more goods. The spending pattern boosted manufacturing activity.

Investors will continue watching COVID-19 case counts, progress on vaccines, and negotiations for additional government stimulus. Beyond that, the Consumer Price Index (CPI) will come out on Thursday.

Consumer Price Index is a widely followed monthly inflation report that looks at the price change for goods and services. The next European Central Bank meeting also will take place on Thursday.

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2021-01-28T22:39:32+00:00 December 8th, 2020|Categories: MortgageTime|Tags: , , , |