Economic update for the week ending August 7, 2021

U.S. employers added 943,000 jobs in July – The Department of Labor and Statics reported that 943,000 new jobs were added in July. That exceeded the 845,000 new jobs experts predicted. Average hourly wages rose 4% year over year. The unemployment rate was 5.4% in July, down from 5.9% in June. It has fallen from a high of 14.8% at the start of the pandemic, but is a long way off from its 3.5% rate before the pandemic.


Strong jobs report pushes stock markets to or near record highs –Stocks rallied on the news that employers added nearly one million jobs in July. It was widely felt that the spike in COVID cases would effect hiring, but it certainly did not in July. The Dow Jones Industrial Average closed the week at 35,208.51, up 0.8%  from 34,935.47 last week. It is up 14.9% year-to-date.  The S&P 500 closed the week at 4,436.52, up 1.0% from 4,395.26 last week. It is up 18.1% year-to-date. The NASDAQ closed the week at 14,835.76, up 1.1% from 14,672.68 last week. It is up 15% year-to-date.


U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.31%, up from 1.24% last week. The 30-year treasury bond yield ended the week at 1.94%, up from 1.89% last week. We watch bond yields because mortgage rates often follow treasury bond yields.


Mortgage rates – The August 5, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 2.77%, almost unchanged from 2.80% last week. The 15-year fixed was 2.10%, unchanged from 2.10% last week. The 5-year ARM was 2.40%, down from 2.45% last week.


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