Loan Officer | NMLS #238561
Branch NMLS #920781
Posted On January 12, 2018
Mortgage rates trended upward this week and both new purchase and refinance mortgage application submissions rebounded after a few slowed weeks. Consumer credit expanded for the third straight month. Job openings dropped off, as the market nears full employment. Retail sales improved.
Consumer credit measures total consumer debt segmented by revolving and non-revolving credit. Revolving credit counts regular monthly debt like credit card bills. Non-revolving credit includes longer-term debt like student loans and auto loans. In November, outstanding consumer credit increased to a 16-year high to a level of $28 billion. Revolving credit increased 13.3% year-over-year and non-revolving credit increased 7.2% year-over-year. The holiday season tends to lift consumer spending and borrowing. Consumer credit has posted solid gains for three straight months.
Job openings declined again in November to a level of 5.88 million, signaling slowed job growth heading into 2018. Layoffs fell to a six-month low, hiring dropped to a level of 5.49 million, and voluntary quits were unchanged at a rate of 2.2%. ZipRecruiter chief economist Cathy Barrera explained, “The low turnover rates indicate that there is less movement in the labor market than at other times when we’ve had very low unemployment. It is great for the labor market to be near full employment, but if workers are staying put, then there is little pressure for employers to raise wages.
Retail sales increased again for the fourth month in a row. In December, total retail sales are up 0.4% month-over-month. The controlled figures, less autos and less autos and gas, were also each up 0.4% month-over-month. Gains were driven by solid consumer spending over the holiday season. The average retail sales gains in November and December mark the strongest holiday spending season in seven years.
Positive economic momentum is likely to carry through into 2018. Unemployment is near a historical low, consumer borrowing is healthy, and spending has strengthened.