By Gregory Heym, BHS Chief Economist and and host of Crossing The Line
Initial claims for unemployment fell to 213,000 in the week ending November 16, their lowest reading since late April. Remember that the Boeing strike and two hurricanes were blamed for the weak October job growth—with just 12,000 jobs added—which certainly could be true. What we weren’t sure of is how long those events would mute job growth going forward. This data seems to tell us the worst is over.
Since mid-October, weekly jobless claims have fallen from 260,000 to 213,000. Such a quick turnaround in layoffs appears to be telling us to expect a big jump in hiring in November. There has also been a lot of buzz from recruiters now that the election has passed that companies are ready to start hiring again.
That would be both a good and bad thing. If hiring picks up sharply it’s certainly good for the economy, but not so good for the fight against inflation. And remember, if inflation goes up 30-year mortgage rates will follow.
How’s that for a happy way to start off? Initial claims for unemployment fell to 213,000 in the week ending November 16, their lowest reading since late April. Remember that the Boeing strike and two hurricanes were blamed for the weak October job growth—with just 12,000 jobs added—which certainly could be true. What we weren’t sure of is how long those events would mute job growth going forward. This data seems to tell us the worst is over.
Since mid-October, weekly jobless claims have fallen from 260,000 to 213,000. Such a quick turnaround in layoffs appears to be telling us to expect a big jump in hiring in November. There has also been a lot of buzz from recruiters now that the election has passed that companies are ready to start hiring again.
That would be both a good and bad thing. If hiring picks up sharply it’s certainly good for the economy, but not so good for the fight against inflation. And remember, if inflation goes up 30-year mortgage rates will follow.
Existing Home Sales Rose 3.4% in October
Sales of existing homes jumped 3.4% last month and posted their first annual gain in over three years. The reasons for the surge in activity were higher inventory levels—which were up 19.7% from a year ago—and the sharp decline in mortgage rates from July to September, when the contracts to buy these homes were most likely signed. Remember when mortgage rates hit a two-year low of 6.08% in late September? It seems so long ago.
You may remember we predicted existing home sales would rise in October last month, when sales fell to their lowest level in 13 years. Unfortunately, mortgage rates have risen in seven of the past eight weeks, so this increase in closings will most likely be short-lived.
Speaking of mortgage rates…
The Average 30-Year Mortgage Rate Rose to its Highest Level Since July
The average 30-year conforming mortgage rate rose to 6.84% last week, its highest level since the middle of July. While that’s not the best news, keep in mind two things:
- Rates were averaging 7.29% a year ago.
- 30-year conforming mortgage rate have averaged 7.70% over the past 50 years.
