Thursday, November 3, 2016 - Article by: Mark Hemingway - Security Financial Services, LLC -
Employment growth in the private sector slowed in October to the slowest pace since May, which could be a result of firms holding off on hiring new workers until after the presidential election is decided. ADP reported that private payrolls rose by 147,000 in October, below the 165,000 expected. However, September was revised higher to 202,000 from the 154,000 originally reported. The report showed that small businesses added 34,000 jobs, mid-size added 48,000, while large companies hired 64,000.
The Federal Reserve's monetary policy statement will be released at 2:00 p.m. ET this afternoon and could carry big headline risk for the U.S. capital markets. It is not expected that the benchmark Fed Funds Rate will rise, but the rhetoric that comes out of the meeting will be closely dissected by the investing community for signs that a hike may come at the December meeting, where the probability of a hike currently sits at 74%. The Fed Funds Rate is the interest rate at which a depository institution lends funds maintained at the federal Reserve to another depository institution overnight.
Mortgage rates edged higher in the latest week to their highest level since June 2016, though still just above record lows. The Mortgage Bankers Association reported that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417K or less) increased to 3.75%, from 3.71%, with points increasing to 0.36 from 0.37 (including the origination fee) for 80% loan-to-value ratio loans. Within the report it showed that total mortgage application volume decreased 1.2%, while the purchase index decreased 0.4% and the refinance index fell 2%.
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