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US economy adds 275,000 jobs in February, unemployment rate ticks higher
The Bahnsen Group CIO David Bahnsen previews Fed Chair Jay Powell’s testimony before Congress and shares his expectations for upcoming job data.
U.S. employers added 275,000 jobs in February, higher than economist estimates of 200,000 and the average monthly gain of 255,000 recorded in 2023, the Labor Department reported on Friday. The unemployment rate ticked up to 3.9% compared to the 3.7% estimate. Still, the blockbuster 353,000 gain in January was revised down to 229,000.
Growth was driven by hiring of healthcare and government employees, along with food services. On the flip side, the manufacturing sector cut 4,000 positions.
Average hourly earnings, a key measure of inflation, increased 0.1% for the month and climbed 4.3% from the same time one year ago. Strong job growth combined with rising wages is fueling inflation, according to some economists.
NUMBER OF HIGH-PAYING JOBS IS DWINDLING
The data may not be enough for the Federal Reserve, which is looking for inflation and the economy to slow, to begin its rate-cutting cycle, which would also come heading into the 2024 presidential election.
“After a series of exceptionally strong labor market reports that threatened to disrupt the expected easing of monetary policy, this data serves as a warning to those concerned about the inflationary pressure on the U.S. economy and the potential impact on interest rates” said Glassdoor’s chief economist Aaron Terrazas following the data.
WASHINGTON, DC – MARCH 7: Federal Reserve Bank Chairman Jerome Powell arrives for a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hillon March, 7 2024 in Washington, DC. Powell testified during a hearing titled “The Semiannua ( (Photo by Kent Nishimura/Getty Images))
Earlier this week, Fed Chairman Jerome Powell reiterated policymaker’s stance to bring down inflation in order to cut rates.
“The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” he said in remarks prepared for testimony before the House Financial Services Committee.
Higher rates have consumers paying more for things such as auto loans and credit cards. As an example, the average percentage rate (APR) for credit cards is 24.61%, as tracked by Lending Tree.
LOWER INFLATION KEY TO FED CUTTING INTEREST RATES
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Currently, the market is expecting the first rate cut to come in June, as tracked by the CME’s FedWatch Tool.
FOX Business’ Megan Henney contributed to this report.
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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