Gregory Heym is Chief Economist at Brown Harris Stevens. His weekly series, The Line, covers new developments to the economy, including trends and forecasts. Read on for the latest report and subscribe here to receive The Line in your inbox.
Initial claims for unemployment fell to 310,000 last week, beating the Dow Jones forecast of 335,000, and reaching their lowest level since the COVID-19 pandemic began. This number would have been even lower if it weren’t for the spike in hurricane-related claims in Louisiana. Continuing claims, which trail by one week, also fell to a new pandemic-era low of 2.78 million.
That all sounds great, but isn’t it really frustrating that so much of the data we get on the labor market seems to contradict each other? We recently found out that August job growth was terrible, due mostly to the Delta variant. Then we found out last week that jobless claims fell for the second straight week to a pandemic-era low. Huh? If you aren’t scratching your head yet, let me add one more. Last Wednesday, the Bureau of Labor Statistics reported that job openings hit a record high of 10.9 million at the end of July. That means there are over two million more available jobs than unemployed workers in the U.S. So, the data is saying that fewer people are losing their jobs, there are almost 11 million job openings out there, but we only added 235,000 jobs last month. I’ve spoken about this conundrum at length in this newsletter, but I must admit it still gets to me. With school starting and federal unemployment benefits gone, many (including me) expect hiring to pick up over the next few weeks. But if recent history has taught us anything, it’s to expect the unexpected from the labor market.
Mortgage Rates Remain in a Tight Range
For the past five weeks, 30-year conforming mortgage rates have averaged between 2.86% and 2.88%. Isn’t it nice to have an economic data series with some stability? Are you listening, labor market?
Freddie Mac chief economist Sam Khater attributes this consistency to slower growth due to the spike in COVID-19 cases. That certainly makes sense, and this data is good news for a housing market where prices are rising in most markets due to low supply.