Last week’s economic reporting included readings on construction spending and public and private-sector employment data. Weekly reports on mortgage rates and jobless claims were also released.
Census Bureau Reports Construction Sending Up by 9.8 Percent Year-Over-Year
Construction spending rose by nearly 10 percent year-over-year in April. Overall construction spending rose by $1.542 billion on a seasonally-adjusted annual basis. Construction spending rose by 0.20 percent in April, which fell short of the expected 0.50 percent reading, and was lower than the March reading of 1.0 percent growth in construction spending.
Residential construction spending increased by one percent in April as compared to the March reading of 2.60 percent. Spending on single-family construction rose by 1.30 percent in April as compared to the March reading of 2.20 percent. Rapidly rising construction costs were fueled by higher lumber costs, but builders said that increasing costs for steel, copper, and plastic also drove higher spending. Builders expect supply chain delays and rising prices to continue impacting all types of construction projects.
Mortgage Rates Inch Up, Jobless Claims Mixed
Freddie Mac reported higher mortgage rates last week, but average rates remained below three percent. Rates for 30-year fixed-rate mortgages rose by four basis points to 2.99 percent. Rates for 15-year fixed-rate mortgages averaged 2.27 percent and did not change from the previous week’s reading. The average rate for 5/1 adjustable rate mortgages was five basis points higher at 2.64 percent. Discount points averaged 0.60 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
First-time jobless claims were lower last week with 385,000 new claims filed as compared to the previous week’s reading of 405,000 initial claims filed. Continuing claims rose to 3.77 million claims as compared to the previous week’s reading of 3.60 million ongoing jobless claims filed.
Jobs Increase as Unemployment Rate Falls
The government’s Non-Farm Payrolls report showed 559,000 public and private-sector jobs added in May; ADP reported 978,000 private-sector jobs added in May as compared to April’s reading of 654,000 private-sector jobs added. The national unemployment rate fell to 5.80 percent in May as compared to April’s reading of 6.10 percent and an expected reading of 5.90 percent.
What’s Ahead
This week’s scheduled economic reporting includes readings on inflation and consumer sentiment. Weekly reports on mortgage rates and 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.