Market update for the week ending September 8 2018
Wages grew at highest pace since 2009. 201,000 new jobs created in August – The Labor Department reported that the U.S. economy added 201,000 new jobs in August. That number beat analysts’ expectations and marked the 95th conservative month of job growth. The unemployment rate held steady at 3.9%, a 50 year low. The highlight of the report was that wages grew 2.9% in August from one year ago. That was the highest wage growth since 2009. Wages have been rising at just 2.6% -2.7% for many years. Usually when unemployment is at historic low rates more competition for workers drives wages up. Experts have been baffled at how stubborn wage growth has been with such robust job gains. In January it appeared that wages were finally moving higher, but wages dropped back to rising just 2.6% – 2.7% year over year in the following months until August. In the coming months we will see if this is a trend to higher wages or just a unique one month reading like we saw in January.
Treasury Bond Yields higher – The 10 year treasury bond closed the week yielding 2.94%, up from 2.86% last week. The 30 year Treasury bond yield ended the week at 3.11%, up from 3.02% last week. We watch Treasury bond yields because mortgage rates follow bond yields.
Mortgage rates – The September 6, 2018 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 4.54%, almost unchanged from
