Last week’s economic reports included readings on construction spending and labor-related reports on jobs and the national unemployment rate. Weekly data on mortgage rates and jobless claims were also published.
The Commerce Department reported overall construction spending rose by 1.30 percent in January, which was the largest increase since April of last year. Private residential construction spending fell by 0.30 percent in January; this was the sixth consecutive month for declining private-sector residential construction spending.
Construction Spending Falls in January
Analysts cited costly building materials, fewer available options for prospective buyers, and higher mortgage rates as factors contributing to less construction spending. Homebuying traditionally slows during the winter months.
Mortgage Rates Little Changed, Jobless Claims Fall
Freddie Mac reported little change in average mortgage rates last week as the rate for 30-year fixed-rate mortgages remained unchanged at 3.55 percent. Rates for 15-year fixed-rate mortgages averaged 2.77 percent and three basis points lower than for the previous week. The average rate for 5/1 adjustable rate mortgages rose one basis point to 2.71 percent on average. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.
Initial jobless claims were lower last week with 238,000 first-time claims filed as compared to the prior week’s reading of 261,000 first-time claims filed. Analysts predicted 245,000 new claims would be filed. Continuing jobless claims were also lower with 1.63 million ongoing claims filed as compared to the prior week’s reading of 1.67 million continuing jobless claims filed.
Labor Reports Show Slower Jobs Growth, Unemployment Rate Ticks Up
ADP Payrolls reported 301,000 fewer private-sector jobs open in January as compared to 776,000 private-sector jobs available in December. Analysts expected 200,000 private-sector job openings in January. The government’s Non-Farm Payrolls report showed 467,000 jobs added in January as compared to the expected reading of 150,000 jobs added and December’s reading of 510,000 public and private-sector jobs added. Hiring in December was higher than expected as analysts predicted less hiring due to the ongoing spread of the omicron variant of COVID-19.
The national unemployment rate rose to 4.00 percent in January as compared to December’s reading of 3.90 percent. Analysts predicted national unemployment to hold steady at 3.90 percent.
This week’s scheduled economic reports include readings on inflation and consumer sentiment along with weekly data on mortgage rates and jobless claims.
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.