Main Content

Economic update for the week ending March 11, 2022

Employers added 311,000 net new jobs in February – The Department of Labor and Statistics reported that 311,000 net new full-time jobs were added in February. That was above the 225,000 jobs economists expected. The unemployment rate rose from 3.4%, its lowest rate since 1969, to 3.6% as more workers entered the workforce. The labor-force participation rate (the share of workers with a job or actively looking for a job) was 62.5% in February, its highest level since the pandemic’s start, yet still well below 63.4% before the pandemic. Average hourly wages increased 4.6% from one year ago, up from 4.4% year-over-year in January.

Stock markets dropped on fears of higher interest rates – Stock markets fell sharply this week as Fed Chairman Powell testified in congress for two days. Legislators grilled him about the need for such a torrid pace of rate hikes and whether a 2% inflation target was realistic. He never flinched about the 2% inflation target insisting that 2% was the world target level and that the Fed had no intention of increasing it. His stanch stand and insistence that the Fed will do whatever is necessary to bring the inflation rate back down to 2% and his admission that there were signs of inflation, which had been moderating, heating back up recently, had investors selling off stocks. The February jobs report showed that the new job creation still performs above expectations. Fed Chairman Powell stated he intends to increase rates to slow hiring. On Friday, bank regulators shut down Silicon Valley Bank, the nation’s 16th largest bank. That caused another sell-off in stocks. Fortunately, that money was moved to the treasury bond market in a move to safety, which lowered bond yields from their decades-high levels earlier in the week. The Dow Jones Industrial Average closed the week at 31,909.64, down 4.5% from 33,390.97 last week. It is down 3.7% year-to-date. The S&P 500 closed the week at 3,861.59, down 4.6% from 4,045.64 last week. It is up 0.6% year-to-date. The NASDAQ closed the week at 11,138.89, down 4.7% from 11,689.01 last week. It is up 6.4% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week, yielding 3.70%, down from 3.97% last week. The 30-year treasury bond yield ended the week at 3.70%, down from 3.90% last week. We watch bond yields because mortgage rates follow bond yields.

Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of March 9, 2023, were as follows: The 30-year fixed mortgage rate was 6.73%, up from 6.65% last week. The 15-year fixed was 5.95%, up from 5.89% last week.

Get

In Touch

Due to emails occasionally vanishing in cyberspace, if you email us and do not hear back within 2-3 hours, please call 818-970-3000.

    Skip to content