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
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
