Thursday, February 4, 2016 - Article by: Mark Hemingway - Security Financial Services, LLC -
The Bureau of Labor Statistics reported on Thursday that Q4 2015 worker Productivity fell by 3.0% versus -1.7% expected,reflecting the decline in economic growth during the quarter. Gross Domestic Product rose by just 0.7% in the final three months of 2015. Productivity rose just 0.6% in 2015, less than 1/3 of the post WWII average. Companies earn more profits and can pay employees higher wages when productivity is strong. But there's less money to go around for workers and shareholders when productivity is low.
Mortgage rates declined in the latest survey and have fallen for five straight weeks in a row due in part to slowing economic growth. Freddie Mac reported on Thursday that the 30-year fixed conventional mortgage rate fell to 3.72% with 0.6 in points and fees. Mortgage rates are now at the lows seen back in April 2015. The 15-year fixed-rate average slid to 3.01% with an average 0.5 point, while the five-year hybrid adjustable-rate mortgage average dipped to 2.85% with an average 0.4 point.
Americans filing for first-time unemployment benefits rose in the latest week, but still remain below the 300,000 level, which is associated with strong labor market. The Labor Department reported that Weekly Initial Jobless Claims rose 8,000 to 285,000 and above the 275,000 expected. Claims have now remained below 300,000 for the 48th straight week, the longest stretch since the early 1970s.
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