US Economic Growth down in 2016, Mortgage rates continue to edge lower, First Time Unemployment benefits remain low
March 30, 2017
Final fourth quarter 2016 Gross Domestic Product (GDP) rose 2.1% from the second reading of 1.9% after a 3.5% increase in the third quarter. For all of 2016, GDP rose an anemic 1.6%, the worst since 2011 and below the 2.6% in 2015. There were some bright spots with the latest numbers. Consumer spending rose 3.5% from the previous reading of 3%, while corporate profits were up 9.3% year-over-year, the most in four years due in part to a recovery in the energy sector.
Mortgage rates continued to edge lower for the second straight week after the run up in home and refinance borrowing costs since the U.S. presidential election in November. Freddie Mac reported that the 30-year fixed conventional mortgage rate fell to 4.16% this week from 4.23% in the previous week. To obtain that rate, a potential borrower would have to pay 0.5 in points and fees. Freddie Mac said that despite the recent mortgage rate fluctuation, new home sales far exceeded expectations.
Americans filing for first time unemployment benefits continue to hover near lows not seen since the early 1970’s as the labor market continues to strengthen. Weekly Initial Jobless Claims came in at 258,000, above the 245,000 expected. Jobless claims have now remained below the 300,000 level for 80 straight week, the longest streak since 1970, and this is associated with a healthy jobs market.