Mortgage Rates Continue to Climb Through Busy Home Buying Season
May 02, 2024 12:50 PM EDT
Mortgage rates moved higher for the fifth straight week, coming in the middle of an important buying season for the housing market.
According to data from Freddie Mac, the 30-year, fixed-rate mortgage moved up to 7.22%. The rise in home borrowing costs comes amid the spring homebuying season, the period between March and June when more than one-third of home sales occur, said Sam Khater, Freddie Mac’s chief economist.
“With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon,” Khater said.
Mortgage rates have been on the rise in 2024. While there has been some evidence that the higher rates are hurting demand in the mortgage industry, there is evidence that some homebuyers are adjusting their expectations amid the higher borrowing costs.
“Many seem to have acclimated to these higher rates, as demonstrated by the recently released pending home sales data coming in at the highest level in a year,” Khater said.
-Terry Lane
Surge in Aircraft Sales Moves Factory Orders Higher
May 02, 2024 11:10 AM EDT
Factory orders moved higher for the second consecutive month in March on a jump in transportation equipment.
Manufacturers reported a $9.1 billion increase in new orders, a 1.6% move up from February’s orders, according to Census Bureau data. Factory orders were just below the projections from economists surveyed by the Wall Street Journal and Dow Jones Newswire.
Orders for transportation equipment, primarily reflecting aircraft, jumped in March by 7.8%. The data also showed another month of increased orders for durable goods, which includes expensive and long-lasting items that can show whether companies are investing in future growth.
Shipments of goods declined by 0.1%, marking the third time in four months that shipments have moved lower.
-Terry Lane
Trade Deficit Narrows as Crude Oil Exports Grow
May 02, 2024 10:49 AM EDT
The U.S. trade deficit narrowed slightly in March after growing in February, as both imports and exports moved lower despite crude oil shipments growing.
The goods and services deficit came in at $69.4 billion in March, a 0.1% drop from the previous month, and slightly lower than economists expected. While experts fell by 2.0%, imports were lower by 1.6%.
For the first three months of 2024, the trade deficit has increased by 3.2% when compared with the same period last year. The data showed that an increase in crude oil led to U.S. export gains. Additionally, wheat exports also moved higher, while exports of soybeans and corn moved lower.
China continued to be the largest exporter to the U.S., though the trade deficit between the two countries narrowed in March.
-Terry Lane
Productivity Growth Slows in First Quarter
May 02, 2024 10:00 AM EDT
Labor productivity growth slowed in the first quarter, as the increase in output from workers was lower than the jump seen last quarter.
Data from the U.S. Bureau of Labor Statistics showed that productivity in the first three months of the year was 0.3% higher than the previous quarter and 2.9% higher year-over-year. That’s a drop from last quarter when labor productivity was 3.5% higher in the 2023 fourth quarter than the previous quarter.
The data showed that hours worked and output both increased in the first quarter. While business labor productivity was higher by 2.8% than a year ago, manufacturing labor productivity rose a more modest 1.2% over the same period.
-Terry Lane
Companies Announced Fewer Job Cuts In April
May 02, 2024 09:17 AM EDT
The job market is in a weird place—companies are hiring fewer people, but layoffs are staying low too.
That impression, created by official government reports, was reinforced Thursday by a count of announced job cuts by U.S. firms compiled by consulting firm Challenger, Gray & Christmas, which showed there were 64,789 announced job cuts in April, 28% fewer than in March and down 3.3% from April 2023.
Whether it will stay that way, or whether a wave of layoffs is coming is a matter of speculation by experts. The job market has so far remained resilient against the Federal Reserve’s campaign of anti-inflation interest rate hikes, which has driven up borrowing costs for all kinds of loans, making it harder for both employers and customers to borrow and spend. High interest rates, however, could eventually take a bite out of the labor market.
“The labor market remains tight. But as labor costs continue to rise, companies will be slower to hire, and we expect further cuts will be needed. This low April figure may be the calm before the storm,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a press release.
A few things other than broader economic forces are at work too. A Texas law banning Diversity, Equity, and Inclusion training at colleges was responsible for 80 job losses, and 800 job cuts were traced to artificial intelligence in the Challenger Report.
