Last week’s economic reporting included readings on construction spending, written testimony from Fed chair Jerome Powell and data on public and private sector jobs and national unemployment. Weekly readings on mortgage rates and jobless claims were also released.
Fed Chair Hints at Rate Hikes in Written Testimony
Federal Reserve Chairman Jerome Powell indicated that consistent rate hikes of the Fed’s target interest rate range will likely occur throughout this year, but he said that the Fed would proceed carefully. Analysts interpreted Mr. Powell’s remarks to mean that he would limit each rate hike to 0.25 percent but could be higher depending on the pace of inflation.
Inflation rose by 7.50 percent year-over-year in January; this was the highest inflation rate since 1982. Chairman Powell said the Fed wanted to prevent persistent high inflation while promoting sustainable economic expansion and a strong labor market. The war in Ukraine could lead to faster inflation as Russia is the world’s second-largest producer of oil.
Mortgage Rates, Fall, Jobless Claims Mixed
Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by 13 basis points to 3.76 percent. Rates for 15-year fixed-rate mortgages were also 13 basis points lower at 3.01 percent and rates for 5/1 adjustable-rate mortgages averaged 2.91 percent and were seven basis points lower on average. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.
Initial jobless claims fell last week with 215,000 new claims filed as compared to 233,000 jobless claims filed in the previous week. 1.48 million continuing jobless claims were filed last week as compared to the prior week’s reading of 1.47 million continuing claims filed.
Jobs Data Shows Mixed Results
Public and private sector jobs data and the national unemployment rate reflected a strong labor market. The government’s Non-Farm Payrolls report tracks public and private-sector job growth and reported 678,000 jobs were added in February as compared to expectations of 440,000 jobs added and January’s reading of 481,000 jobs added.
The ADP jobs report includes only private-sector jobs data; 475,000 jobs were added in February as compared to predictions of 400,000 jobs added and January’s reading of 509,000 private-sector jobs added. The national unemployment rate dropped to 3.80 percent; analysts expected an unemployment rate of 3.90 percent and January’s jobless rate of 4.00 percent.
This week’s scheduled economic reporting includes readings on job openings and quits, inflation, and the University of Michigan’s preliminary reading on consumer sentiment. Weekly reports on mortgage rates and jobless claims will also be released.Share