Friday Recap: Slow Market Movement Ahead of Next Week’s Election
Mortgage rates hovered this week, barely shifting from Monday to Friday’s rates. Lower than estimated numbers came in with US construction spending showing the first year-over-year drop in five years and ADP employment grew at the slowest pace since May 2016. Following the FOMC meeting, the Federal Reserve announced a strengthened case for a rate hike but held off on raising rates ahead of the election.
US construction spending dropped 0.4% in September with declines across the board. Private construction projects, private nonresidential structures, and public construction spending fell failing to meet 0.5% gain projections.
ADP employment reported the addition of 147,000 jobs to the private sector, much lower than the projected growth of 170,000 jobs. According to ADP’s Mark Zandi, sluggish gains could be a result of “businesses’ difficulty filling open positions [also] there is some weakness in construction, education and mining.”
The Federal Reserve met on Tuesday and Wednesday issuing this statement regarding interest rates, “The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of further progress toward its objectives.” Economists predicted the Fed would hold off on a rate hike the week before a major presidential election.
Mortgage rates fluctuated very little this week, following the national economic pattern. Markets in general have stayed relatively quiet, as is typical before a Presidential Election.
Sources: Mortgage Daily News, Federal Reserve, Zero Hedge, MarketWatch, MarketWatch, Reuters