Monthly employment gains have generally been what most analysts would consider solid for much of the year.
However, the job growth reported in August’s Employment Situation fell short of expectations (151,000 jobs created), and was widely viewed as a deal breaker for the Fed in deciding whether or not to raise the federal funds target rate in September.
With many industry stakeholders looking toward December for another rate hike by the Fed—which would be their first since December 2015 and only their second in 10 years—the BLS Employment Situation reports for September, October, and November, all of which will be published before the Fed’s December policymaking meeting (December 13 and 14).
Labor market data reported in the Employment Situations are often key in the Fed’s determination as to whether economic growth has been sufficient enough to move the rates. The September Employment Situation will be published this Friday, October 7, at 8:30 a.m. EST.
“While (August’s Employment Situation) was a solid report overall, it nonetheless fell short of expectations. Job growth and wage gains both slowed, while the unemployment rate and labor force participation remained at previous levels," National Association of Federal Credit Unions (NAFCU) Chief Economist Curt Long said. “Simply put, this report is not enough to compel the Fed to raise rates in September, and the focus will shift to December as the most likely date for the next rate hike.”
While mortgage rates were already below 4 percent around the time of the last Fed rate hike last December, they have fallen even lower since the rate hike, hovering around 3.5 percent for the last three months. Analysts do not expect a rate hike by the Fed to prompt an increase in mortgage rates, at least in the near term.
Tuesday, October 4—Home Price Index for August 2016, CoreLogic
In the July CoreLogic Home Price Index (HPI), home prices appreciated at the rate of 6 percent year-over-year and are forecasted to continue to rise at a rate of 5.4 percent by July 2017.
According to CoreLogic, the current economic climate is providing the perfect setup for an increase in home sales.
“If mortgage rates continue to remain relatively low and job growth continues, as most forecasters expect, then home purchases are likely to rise in the coming year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The increased sales will support further price appreciation, and according to the CoreLogic Home Price Index, home prices are projected to rise about 5 percent over the next year.”
This week’s schedule
Monday, October 3
Construction spending for August 2016, U.S. Census Bureau, 10 a.m. EST
Mortgage Monitor for August 2016, Black Knight Financial Services
Tuesday, October 4
Home Price Index for August 2016, CoreLogic
Friday, October 7
Employment Situation for September 2016, Bureau of Labor Statistics, 8:30 a.m. EST