Private employers continued to add jobs in February, and refinancing a mortgage continued to lose its appeal amid rising interest rates, reports showed Wednesday.
Here’s a quick look at the most significant economic indicators of the day and what they tell us.
Private Sector Employment
- The job market chugged along in February, adding 455,000 private-sector jobs, according to an estimate by payroll company ADP. It’s the fewest since August, but not all that far off from the growth of recent months. Almost every major sector of business gained jobs. The leisure and hospitality sector led the way by adding 161,000 jobs as COVID-19 cases receded and restaurants and hotels continued to recover.
- Economists expect the official government figures from the Bureau of Labor Statistics to tell a similar tale when they’re released Friday, though that report includes government jobs and is tallied differently. Still, some took the ADP report with a grain of salt since it has been so different from the BLS report in past months.
- Refinancing a mortgage continued to lose its appeal as interest rates rose to their highest levels in more than three years, according to an index from the Mortgage Bankers Association. The volume of refinancing applications fell for the third week, declining 15% last week. The average rate offered for a 30-year fixed mortgage rose to 4.8%, the highest since December 2018, and a full percentage point higher than it was two months ago.
- The volume of applications for purchases, however, actually rose a small amount—less than 1%— from the relatively low level the previous week, a surprise to MBA given the rising rates, high home prices, and shortage of homes for sale.
Real Gross Domestic Product
- The government’s final estimate of fourth-quarter economic growth showed inflation-adjusted gross domestic product grew at an annualized rate of 6.9%, rather than the 7% previously estimated. (That’s three times the growth in the third quarter, when the delta variant of COVID-19 triggered a surge in cases.) The final estimate for all of 2021 didn’t change, showing the economy grew 5.7% last year after shrinking 3.4% when the pandemic struck in 2020, according the Bureau of Economic Analysis.
- Economists expect the pace of growth to slow in 2022 amid soaring inflation, a reduction in government aid, and higher borrowing costs.
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