Overview: While mortgage markets remained very volatile over the past week, there was little news to significantly change the outlook for future Federal Reserve policy or the conflict in Ukraine. The daily movements were roughly offsetting, and rates ended the week up just slightly, at the highest levels since early 2019.
The latest data from the Job Openings and Labor Turnover Survey (JOLTS) report indicated that the labor market remains very tight. At the end of February, there were a massive 11.3 million job openings, slightly below the record high seen in December, and over 4 million more than in January 2020 prior to the pandemic. There were a record 1.8 openings for every unemployed person in the U.S. A high level of job openings reflects a strong labor market, as companies struggle to hire enough workers with the necessary skills. A very large number of employees also willingly left their jobs in February. This is viewed as a sign of labor market strength as well, since people usually quit only if they expect that they can find better jobs.
The Department of Labor releases the total number of new claims for unemployment insurance each week, and the latest reading was just 187,000, the lowest level since 1969. This compares with elevated figures in the millions seen in the spring of 2020 during the partial shutdown of the economy. Since companies generally are having a very difficult time hiring enough employees, they are reluctant to lay off workers.
The rapid increase in mortgage rates this year has significantly reduced refinancing activity, while purchase activity has held up relatively well. The latest reading for the refinance index from the Mortgage Bankers Association (MBA) was 60% lower than one year ago at this time. The purchase index was just 10% lower than a year ago, but analysts predict larger declines later in the year.
Job Openings (millions)
Core Personal Consumption Expenditures (PCE) Price Index
Institute for Supply Management (ISM) Manufacturing Index
ISM Services Index