Last week’s economic reports included readings on construction spending and multiple labor sector reports including private and public sector jobs and the national unemployment rate. Weekly reports on average mortgage rates and first-time jobless claims were also released.
Construction Spending Falls 0.80 Percent in October
Commerce Department reports on construction spending said that spending fell by 0.80 percent to a seasonally-adjusted annual rate of $1.29 million. Analysts expected construction spending to increase by 0.40 percent based on September’s original reading of 0.50 percent growth, which was later revised to -0.30 percent.
Less construction of multifamily homes and apartments caused a decrease in October construction spending. Private construction spending fell by -1.00 percent in October; residential construction fell 0.90 percent as multi-family construction spending fell 1.60 percent after a 2.10 percent dip in September. Construction spending on single-family homes increased by 1.60 percent.
Low mortgage rates, a strong job market, and rising wages contributed to a strong demand for homes. Short inventories of available homes continued to pressure home builders to build more homes; construction of homes jumped 3.80 percent in October.
Mortgage Rates, Mixed, New Jobless Claims Fall
Freddie Mac reported no change in the average rate of 3.68 percent for 30-year fixed-rate mortgages; rates for 15-year fixed-rate mortgages averaged 3.14 percent and were one basis point lower than for the prior week.
Rates for 5/1 adjustable-rate mortgages fell four basis points on average to 3.39 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed-rate mortgages and 5/1 adjustable-rate mortgages.
First-time jobless claims fell from the prior week’s reading of 213,000 claims to 203,000 claims filed last week. ADP reported 67,000 private-sector jobs added in November.
The federal government’s Non-Farm Payrolls report offset the dismal reading for private-sector job growth. 266,000 public and private sector jobs were added in November and surpassed expectations of 180,000 public and private sector jobs added.
Approximately 55,000 were accounted for as auto workers returned after a strike. 156,0000 public and private sector jobs were added in October. The national unemployment rate dropped to 3.50 percent in November and matched the reading for unemployment posted at the end of 1969.
What’s Ahead
This week’s scheduled economic reports include readings on inflation, retail sales and the post-meeting statement from the Federal Reserve’s Federal Open Market Committee. Fed Chair Jerome Powell is scheduled to give a press conference after the FOMC statement. Weekly readings on mortgage rates and new jobless claims will also be released.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.