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Economic Update for the Week Ending October 9th, 2021

U.S. employers added 194,000 jobs in September – The Department of Labor and Statics reported that 194,000 new jobs were added in September. That number disappointed analysts as economists surveyed had predicted 500,000 new jobs. August’s new jobs number was revised up to 366,000 from an initial report of 245,000 jobs added, but it’s still a long way off from the nearly 1 million new jobs added monthly up to July 2021. The slowdown in hiring over the past two months is a trend which has everyone concerned that the recovery may be stalling.  Experts pointed to a pullback in hiring due to a surge in new COVID cases in August, but new cases were on the decline in September and hiring continued to slow. Average hourly wages rose 4.6% year over year. Many workers have also left the workforce. The labor-force participation rate, (the share of workers with a job or actively looking for a job), dropped to 61.6%, down from 63.6% before the pandemic. The unemployment rate was 4.8% in September, down from 5.2% in August. It has fallen from a high of 14.8% at the start of the pandemic, but is a long way off from its 3.5% rate before the pandemic.

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Stock markets were slightly higher this week – Stock markets were pretty stable this week which calmed investors who were on edge after last week’s sell off. A temporary deal to raise the debt limit until December encouraged investors, but the disappointing jobs report and increasing wages combined with shortages of labor and materials have investors worrying about inflation. The Dow Jones Industrial Average closed the week at 34,746.25, up 1.2%  from 34,326.46 last week. It is up 13.3% year-to-date.  The S&P 500 closed the week at 4,391.34, up 0.8% from 4,357.04 last week. It is up 16.9% year-to-date. The NASDAQ closed the week at 14,579.54, down 0.1% from 14,566.70 last week. It is up 13.2% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.61% up  from 1.48% last week. The 30-year treasury bond yield ended the week at 2.16%, up, from 2.04% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Mortgage rates – The October 7, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 2.99% down from 3.01% last week. The 15-year fixed was 2.23% down from 2.28% last week. The 5-year ARM was 2.52% up from 2.48%  last week. 

Sources:

  1.  Rodeo Realty, Inc.
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