The economy got a little shot of good news with the June employment report. New jobs jumped by 287,000. Which is a far cry better than May’s adjusted 11,000. Overall more than 414,000 people were added to the workforce in June. Nice bump.
Unfortunately, the average hourly wage rose by only 2 cents up to $25.61, following a 6-cent hike in May. Average hourly earnings have only increased by 2.6 percent since June of last year. Not a huge change.
The June report helped to relieve many economists’ fears of a recession, but the numbers still do not approach a growth level that might have the Fed thinking of a rate hike. So, what we have is not recession, not inflation, but economy stagnation.
Mortgage rates should remain low for a while longer fueling more potential refinances. However, with a tightening labor market, and minimal job and wage growth, the overall outlook for the housing market is not all that good. The employment market needs to improve.
According to Doug Duncan, Fannie Mae’s Chief Economist, “There was nothing in the report to encourage housing supply enthusiasts.” Duncan noted that the components of June’s employment summary outside of the total job gains, such as wage growth and a flat workweek (34.4 hours for the fifth consecutive month), were “uninspiring.”
New home buyers may be a little tougher to come by, but for now, lenders should continue to pursue the refi market. According to Carl Spackler, “So, I got that goin’ for me, which is nice.”
Hit ‘em long and straight.