Scotsman Guide > News > July 2017 > News Story

 Enter your e-mail address and password below.

  •  
  •  

Forgot your password? New User? Register Now.

News Archives

 
Subscribe icon Subscribe to our weekly e-newsletter, Top News.

Blog: June's jobs report could lock in Fed's path


Federal Reserve Chair Janet Yellen testified before Congress this week, but most analysts have already penciled in what the central bank has in store for the rest of 2017. Last week’s strong jobs report did nothing to change this path.

Fed policymakers have signaled that they will raise the federal funds rate one more time this year by a quarter percent, and also begin an incremental program of reducing, or tapering, $4.5 trillion in holdings of mortgage-backed securities and U.S. Treasuries. Both these moves could indirectly push up longer-term mortgage rates.

fedreserveThe current betting has the Fed announcing the start date of its so-called tapering program at the September meeting, and raising the federal funds rate in December.

There also are meetings slated for July 25-26 and at the end of October. Yellen has not scheduled news conferences after the July and October meetings. Thus these are viewed as less likely meetings for major policy announcements.

Yellen delivered a semiannual report on Wednesday before the Housing Financial Services Committee. She was also scheduled to testify the next day before the Senate banking committee. 

If the economy were to slow down, the Fed could delay moves to tighten monetary policy. Friday’s June jobs report, however, exceeded expectations.

The U.S. added 222,000 jobs in the month, and the estimated gains in April and May were revised upward by 47,000 jobs.

Although the unemployment rate edged up slightly to 4.4 percent, the economy has averaged 180,000 jobs gained per month this year, which is just slightly below the 187,000 monthly average for all of 2016. May’s job’s gains were revised to 207,000, up from to 174,000; and May’s figures were boosted to 152,000, up from the original estimate of 138,000. 

“All in all, the [jobs] report signals no sense of urgency for the Fed, and should give the Fed every reason to stay the course of a gradual monetary policy normalization as it has been telegraphing to the markets,” Fannie Mae Chief Economist Doug Duncan said.

“We now expect the Fed to announce its policy to taper the balance sheet in September and hike the fed funds rate once more this year in December,” Duncan said.

It wasn’t all great news, however. Wage growth continues to disappoint.

Average hourly wages rose four cents in June to $26.25. Wages have come up 63 cents since the start of the year, or 2.5 percent. By contrast, home prices on a national basis are rising at an annual pace of around 6 percent.

Hiring in the residential construction sector also was disappointing. Residential construction hiring was down for the fourth consecutive month, said Danielle Hale, managing director for housing research at the National Association of Realtors. Many analysts say labor shortages are holding back the construction industry, and more hiring is needed to boost single-family starts and relieve inventory shortages. 

This article was changed to correct the days of Fed Chair Janet Yellen's scheduled testimony before Congress. 


 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

Bubble 0 Comments

By submitting this comment, you agree to comply with our Terms of Use.



The text exceeds the maximum number of characters allowed.


Are you sure you want to permanently delete this blog comment? This action cannot be reversed.



You must enable your community profile to use this feature.

Cancel Enable profile

You have flagged this post for inappropriate content.

Please explain below. Thank you.

Cancel Submit

Get the latest news and articles from Scotsman Guide straight to your inbox.


Send me the following e-mails:





Learn more about Scotsman Guide e-mails

Thank you for signing up to receive e-mails from Scotsman Guide.

A confirmation e-mail has been sent to the address you provided.

For questions regarding your e-mail subscriptions please contact Circulation@ScotsmanGuide.com or call (800) 297-6061.


Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Follow Us:Visit Scotsman Guide Facebook pageVisit Scotsman Guide LinkedIn pageVisit Scotsman Guide g+ pageVisit Scotsman Guide Twitter page
 
 
 
 

 
 

© 2018 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy