First time unemployment at multi-decade lows, Mortgage rates unchanged this week, Yellen at Fed hosted economic synposium

August 25, 2016

Thursday – August 25

The number of Americans applying for first time unemployment benefits hover near multi-decade lows as the labor market continues to improve. Weekly Initial Jobless Claims fell 1,000 in the latest week to 261,000, the lowest in five weeks, and have trended below the 300,000 threshold for 77 consecutive weeks. That is the longest streak since 1973 when the labor market was smaller. The labor market is now viewed as near full employment, though the quality of jobs is suspect, and wage growth has been on the low side. Freddie Mac reported that mortgage rates were unchanged this week and continue to hover just above all-time lows. The 30-year fixed conventional rate ($417,000 or less) remained at 3.43% with 0.6 in points and fees. The 3.43% marks the ninth straight week that mortgage rates rates have been below 3.5%. The Federal Reserve continues to hold interest rates rates near the lows in an effort to spur on the economy. Fed Chair Janet Yellen will be speaking in Jackson Hole, Wyoming at the Fed hosted economic symposium. Ms Yellen’s speech on Friday morning (August 26 at 10:00 a.m. ET) will be closely dissected by investors and traders around the globe for insight as to the health of the world’s largest economy and as to the timing of future interest rate hikes. Ms. Yellen speech will most likely not make any big surprises to cause the markets to plunge or rally to new heights, but she could begin to lay the groundwork for future rate hikes. Recent talks from some of her underlings have been hawkish, but the market is not pricing in a hike to the short-term Fed Funds Rate next month. Fed Fund Futures show just a 21% chance of a hike next month, with a 41% chance at the November Fed meeting.