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Last week there was more evidence of an economy that continues to slow. The economy added more jobs, but it was the slowest pace of growth in the past two years. Construction jobs remained relatively flat and single-family construction continued trending down declining for the 4th consecutive month. On the bright side, the Consumer Price Index came in better than expected yesterday, and the rates on the 30 year fixed rate mortgage have come down about .5% since then.
U.S. employment grows at slowest pace since December 2020: According to the nonfarm payrolls survey, the U.S. economy added 261k jobs as hiring remained strong in October. However, despite the broad-based gains, this was the slowest pace in job growth in nearly 2 years. Construction employment was roughly flat. In addition, the household survey showed sings of deterioration in the labor market – actually declining by 328k jobs for the same month. The survey also showed labor force participation rate dipping back to where it was at the start of the year, which nudged the unemployment rate slightly higher to 3.7% from 3.5% the month prior. Although demand for labor remains elevated, the very first cracks are starting to show in diverging messages between the employer and household labor market surveys conducted by the Bureau of Labor Statistics each month.
Consumer Price Index comes in better than expected: Yesterday's consumer price index showed prices were up 7.7% from a year ago, down from September's 8.2% rate and below expectations for an 8% rise. Prices were up 0.3% from a month ago, when excluding volatile food and energy prices, below an expected gain of 0.5%. The surprising data spurred hopes that inflation has, finally, peaked. This good news has caused 30 year fixed rate mortgage rates to drop about .5%, which is welcome news for many home buyers.
Despite the slowing market, there are opportunities for buyers and sellers. Lenders are offering options for home buyers to buy down their interest rate and sellers in some cases are offering credits to help buyers obtain a more affordable rate. If you would like to discuss today's market and whether now is a good time for you to buy or sell, give me a call at (562) 900-9430.
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