Unemployment Rate Fell to Lowest Level Since Early 2020

While mortgage markets stay volatile, the unemployment rate fell to the lowest level since early 2020. Overall, the labor market and inflation data neared their expected levels. However, the daily movements offset one another.

According to Freddie Mac’s weekly survey, mortgage rates increased roughly 1.5% higher than a year ago. Conclusively, mortgage rates hit their highest levels since December 2018.

Unemployment Rate Fell to 2020 Levels

Friday’s Employment report came in right on target. Against a consensus forecast of 475,000, the economy gained 431,000 jobs in February 2022. Also, revisions added 95,000 to the results from prior months.

The unemployment rate fell from 3.8% to 3.6%. Thus, the unemployment rate hit its lowest level since early 2020. Average hourly earnings jumped an impressive 5.6% higher than a year ago. Additionally, they rose up from an annual rate of 5.2% last month.

Unemployment Rate Fell to Lowest Level Since Early 2020 mortgagetime mbsquoteline chart

PCE Price Index & ISM News

As the unemployment rate fell, the core PCE price index climbed 5.4% higher than a year ago in February. In doing so, core PCE increased 5.2% last month and the highest annual rate since 1983. For comparison, readings fell below 2.0% during the first three months of 2021. Investors question how quickly inflation will moderate as pandemic-related disruptions resolve.

In addition, the Institute of Supply Management (ISM) remained at a high level by historical standards. The national manufacturing sector index for March came in at 57.1. Levels above 50 indicate that the sector is expanding. Readings above 60 are rare.

Looking Ahead After the Unemployment Rate Fell

After the unemployment rate fell to early 2020 levels, investors continue to follow news on Ukraine. Also, they seek additional Fed guidance on the pace of future rate hikes and balance sheet reduction.

Beyond that, next week offers little major economic reporting. The biggest release comes from Tuesday’s ISM National Service Sector Index.

While the unemployment rate fell, mortgage rates hit 2018 levels. Never miss an update with MBSQuoteline. To receive by-the-minute updates on mortgage-backed securities, try our platform free for 14 days.

Unemployment Rate Fell to Lowest Level Since Early 2020 mortgagetime mbsquoteline data

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