New Workers, Job Cuts, Mortgage rates tick higher

June 02, 2016

Thursday – June 2

Labor market news dominated the headlines this morning. First up was the May ADP Payrolls report where it showed that private employers added 173,000 new workers, which was below the 180,000 expected. April was revised higher to 166,000 from 156,000. Small businesses with fewer than 50 workers added the bulk of the new workers, followed by transportation, utilities and construction, and financial companies.

Outplacement firm Challenger, Gray & Christmas reported that planned May Job cuts fell to a five-month low, down 53% from April. Challenger reported that there were 30,157 planned job cuts in May, down from the 64,141 cuts announced in April. May was the lowest monthly total since last December, when 23,622 job cuts were recorded. Since January, employers announced 275,218 job cuts, 13% higher than the 242,830 job cuts announced in the first five months of 2015.

Mortgage rates continued to edge higher this week and have increased for the third straight week in a row, though rates are still near three-year lows. Freddie Mac reports that the 30-year fixed conventional mortgage rate ($417,000 or less) rose to 3.66% this week from the 3.64% recorded last week. To obtain that rate, a potential borrower would have to pay 0.5 in points and fees. A year ago this time, the rate was 3.87%.