Employment Growth declined, Housing Sector bright spot, Market Composite Index rose
August 31, 2016
Wednesday – August 31
Employment growth in the private sector declined from July to August though the sector continues its improving ways. ADP reported that private payrolls rose by 177,000 in August, just above the 170,000 expected, but below the 194,000 recorded in July, which was revised from 179,000. ADP said small businesses added 63,000 jobs, mid-size ones added 44,000 and large companies saw a gain of 70,000. Mark Zandi, chief economist of Moody’s Analytics, said, “The American job machine continues to hum along. Job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls. The U.S. economy will soon be at full employment.”
The housing sector continues to be a bright spot in the U.S. economy due to low mortgage rates and an improving job sector. The National Association of REALTORS® reported that Pending Homes Sales in July rose 1.3% from June and above the 0.7% expected. The index rose to 111.3, the second highest level in 2016 and 1.4% above a year ago. The gains were led by a sizable surge in the West, which was the highest in over three years.
The Mortgage Bankers Association (MBA) reported on Wednesday that its Market Composite Index, a measure of total mortgage application volume, rose 2.8% in the latest week. The refinance index increased 4%, while the purchase index rose 2%. The MBA also said that the average contract rate for 30-year fixed mortgages with conforming loan balances ($417,000 or less) remained at 3.67% with 0.33 in points. In addition, the average contract rate for 30-year fixed mortgages with jumbo loan balances (greater than $417,000) rose to 3.63% from 3.62% with 0.27 in points.