Mortgage Rates, Manufacturing Looking Like 2008

Mortgage rates and manufacturing output hit levels harkening back to the 2008 recession while jobless claims remained steady, reports showed Thursday.

Here’s a quick look at the most significant economic indicators of the day and what they mean for consumers.

Freddie Mac Mortgage Rates

• The Number: The rate for a 30-year fixed mortgage rose again, this time to its highest level since November 2008, according to a survey by Freddie Mac. 
• What the Economists Are Saying: High home prices, along with mortgage rates more than 2 percentage points above where they were in January, are scaring off some potential homebuyers. But there’s still a healthy level of interest out there in purchasing a house.
• What It Means for You: Rising interest rates and home prices have driven monthly mortgage payments up about 64% over last year, by Realtor.com’s count. Because of the squeeze of higher rates, the pandemic sales boom is fading and there are more houses on the market for buyers to choose from.

S&P Global Flash US Manufacturing Purchasing Managers’ Index

• The Number: The index, which is an early estimate based on surveys of manufacturers, fell to its lowest level in nearly two years in June, according to S&P Global. Companies reported a decline in factory production mirroring depths reached during 2020’s pandemic lockdowns and the financial crisis in 2008.
• What the Economists Are Saying: Economists didn’t anticipate such a dramatic dive, having forecast the index to fall by just one point from May. 
• What It Means for You: Manufacturers are producing less because consumers are buying less. As the cost of living increases, consumers are spending more on everyday necessities like groceries, utilities, and gas as well as services and less on manufactured goods.

Jobless Claims

• The Number: The number of people filing new unemployment claims decreased by 2,000 last week, a slight dip for the second week in a row. However, the four-week moving average of people filing for jobless benefits was up 4,500 from the prior week.
• What the Economists Are Saying: Economists, who expected about 4,000 fewer people to file initial claims, see last week’s figure as evidence the job market is moderating some. That’s just what the Federal Reserve hopes its anti-inflation, interest-rate-raising campaign will achieve.
• What It Means for You: Employers will likely remain on the hunt for workers, despite some business sectors, like technology, reporting a rise in layoffs. Be on the lookout for hiring freezes as companies keep a watchful eye for signs of a recession.
  

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