The Mortgage Corner
The number of job openings was little changed at 7.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, hires changed little at 5.3 million. The number of total separations was little changed at 5.3 million. Within separations, quits (3.3 million) increased, but layoffs and discharges (1.6 million) changed little.
The above graph of job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS report show normal job growth, according to the Bureau of Labor Statistics. But will it recover from the Boeing and east coast strikes that laid off so many workers?
The JOLTS report doesn’t give much encouragement to Friday’s unemployment report for November, as the number of hires equaled the number of separations. The difference usually tells us the total number of job creations.
It’s hard to know what this means for the Trump administration’s next four years. Chairman Powell is still sounding dovish about another -0.25 percent rate cut in December, which will be helpful. But credit card rates are still as high as 30 percent, which is an insane borrowing rate for those using credit cards.
“The Fed’s goal all along has been to bring down inflation without a “painful rise in unemployment,” Powell said in remarks at the annual meeting of the National Association for Business Economics in Nashville,” per MarketWatch. “While the task is not complete, we have made a good deal of progress toward that outcome,” he said.
The Institute for Supply Management (ISM) surveys of both the service and manufacturing sectors were also static, with manufacturing not expanding at all and the service sector barely above its 50-point breakeven level.
“Demand remains weak, said Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®), “as companies prepare plans for 2025 with the benefit of the election cycle ending. Production execution eased in November, consistent with demand sluggishness and weak backlogs. Suppliers continue to have capacity, with lead times improving but some product shortages reappearing. Sixty-six percent of manufacturing gross domestic product (GDP) contracted in November, up from 63 percent in October.”
This is what happens between election cycles. Will the Trump administration carry out on its threats of giant tariffs, or deporting millions of undocumented immigrants who are employed in the service sector that includes professional services and construction? Construction is booming as the CHIPS and Infrastructure Acts pour $Trillions into mostly red state projects such as new computer chip manufacturing factories.
The service sector that also includes leisure activities such as dining and travel will wind down after the holidays. But the financial markets are still rallying on the hopes that further tax cuts will boost both bond and stock prices.
It’s a difficult time to predict what comes next. Further Fed rate cuts are desperately needed to revive the housing market, for instance.
Pending home sales ascended in October – the third consecutive month of increases – according to the National Association of REALTORS®. All four major U.S. regions experienced month-over-month gains in transactions, with the Northeast leading the way. Year-over-year, contract signings increased in all four U.S. regions, led by the West.
"Homebuying momentum is building after nearly two years of suppressed home sales." said NAR Chief Economist Lawrence Yun. "Even with mortgage rates modestly rising despite the Federal Reserve's decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market."
That gives homebuyers a ray of hope that interest rates will continue to decline, as well as for credit card users.
Harlan Green © 2024
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