The week ended on a November Jobs report that delivered less-than-expected payroll gains and a slightly higher unemployment rate, but Wall Street basically shrugged it off. In fact, there was enough good economic news that investors sent all three stock market indexes UP solidly for the week.
Let’s start with those disappointing employment numbers. Non-farm payrolls grew in November by 39,000, but the consensus expected 150,000. But September and October revisions added 38,000 jobs, taking the net gain to 77,000. Payrolls in the private sector were up 50,000, their eleventh straight monthly gain, and prior months’ revisions added 6,000, for a net gain of 56,000. No one was happy to see the unemployment rate creep up to 9.8%, but with growing payrolls, more people are jumping back into an improving jobs market, so the workforce is growing. New weekly jobless claims also grew, but the four-week moving average dropped to its lowest level in over two years.
More obvious good economic news came in the form of the rising October Pending Home Sales figure reported above. Q3 Productivity was also UP 2.3% annually and UP 2.5% over last year. Both Chicago manufacturing and Consumer Confidence numbers were UP and the ISM Services index came in better than expected, as did same store retail sales. Even all the recent fears over European debt subsided, with the European Central Bank President hinting at more support for the region.
For the week, the Dow was UP 2.6%, to 11382.09; the S&P 500 was UP 3.0%, to 1224.71; and the Nasdaq was UP 2.2%, to 2591.46.
Even though bonds first benefited from the disappointing jobs report, prices eventually came under pressure from money flowing back into rallying stocks. The FNMA 30-year 4.0% bond we watch ended down 89 basis points for the week, closing at $100.20. National average rates for fixed-rate mortgages headed north a tad, according to Freddie Mac’s survey of conforming mortgage rates. They’re still at historically low levels, but wise buyers and refinancers shouldn’t wait.
Bob Mann
Senior Mortgage Banker – Prime Lending