Economic update for the week ending March 5, 2022

U.S. employers added 478,000 new jobs in February - The Department of Labor and Statistics reported that 678,000 new jobs were added in February. Economists surveyed had expected 400,000 new jobs. This was a stellar number in a short month. The unemployment rate fell to 3.8% in February, down from 4% in January. The labor-force participation rate (the share of workers with a job or actively looking for a job) rose to 62.3% in February, up from 62.2% in January. It remains below the 63.6% level before the pandemic but is moving up steadily as more people are returning to the workforce. Average hourly wages did not increase month-over-month but are up on a year-over-year basis.

Stock markets were down this week - All eyes were focused on the war in Ukraine as Russia escalated its heavy bombardment of the country. Increased sanctions have shut off Russia from the world. That will have some impact at home. Oil prices jumped to $116 a barrel, the highest level since 2008. Gas prices hit the highest levels ever seen and this will also force up energy costs. At the same time, stellar jobs reports and continued strong corporate profits have the U.S. economy looking pretty resilient. The Dow Jones Industrial Average closed the week at 33,614.17, down 1.3% from 34,058.75 last week. It is down 7.5% year-to-date. The S&P 500 closed the week at 4,328.87, down 1.3% from 4,384.65 last week. The S&P is down 9.3% year-to-date. The NASDAQ closed the week at 13,314.44, down 2.8% from 13,694.52 last week. It is down 14.9%, year-to-date.

U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 1.74%, down from 1.97% last week. The 30-year treasury bond yield ended the week at 2.16%, down from 2.29% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates - March 3, 2022, Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products were as follows: The 30-year fixed mortgage rate was 3.76%, down from 3.89% last week. The 15-year fixed was 3.01%, down from 3.14% last week. The 5-year ARM was 2.91%, down from 2.98% last week.

Initial Jobless Claims

Initial Jobless Claims fell -18k to 215k for the week ending February 26th. The 4-week moving average of headline claims declined for the fourth consecutive week, dropping -6k to 230.5k, its lowest since the week of January 8th. Continuing claims, which lag by a week, were up 2k to 1.476mln for the week of February 19th. Continuing claims haven't been at this low of a print since the early 1970s. Total claimants in all programs fell from 2.034mln to 1.971mln in the week of February 12th. This was the third-lowest reading since the end of 2019.

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