Market Matters – April 3, 2021 Edition

April 3, 2021
/ Austin Horseshoe Bay Lakeway Ranches Ranches $1-1.5 Million Texas Texas Coastal Bend Texas Hill Country Texas Lakes and Rivers Texas Ranches For Sale
/ By Michael Brown

The biggest news to come this week was a strong beat in the job numbers for the month of March. The strong beat is a good sign that the economy is improving, most likely due to the states reopening, a drop in Covid-19 cases, vaccine rollout, and the stimulus. While the increase in jobs is encouraging, we will need to see the economy recover many more jobs to get back to the level prior to the pandemic. For the time being, there is optimism in the recovery, and it would be best to stay defensive.

Initial Jobless Claims

Initial Jobless Claims increased by +61k to 719k for the week ending March 26th over the prior week’s revised print of 658k (orig. 684k). This now put the 4-week moving average of new claims at the 719k mark, the lowest since March 2020. Continuing claims, which lag by a week, fell by -46k to 3.794mln from a prior 3.84mln, now the lowest level since March 21st at 3.059mln. Continuing claims are now down -19.3mln from the highs reached during the May 9th week of last year. Those claims have fallen in each week but three since July 2020, and over that time, they have fallen at a total of -13.1mln.

Jobs Report

Nonfarm payrolls in March rose +916k with private payrolls up +780k, and government up +136. This is the largest gain in headline jobs since August 2020. We also see strong revisions with February up to +468k from +379k, and January up to +233k from +166k, a net change of +156k. Looking back into the March report, leisure and hospitality rose +280k, construction was up +110k, education up +64k, and manufacturing +53k. Within the household survey, the unemployment rate fell to 6% as expected, as there was a good mix of labor force growth of +347k, and employment growth of +609k. The labor force participation rate rose +.1 to 61.5%, back to where it was last December. Average hourly earnings were down -.1% on the month, however it was reported there was a good mix of lower wage workers returning. Looking YoY, wage growth fell from +5.2% to now +4.2%. Finally, the workweek saw a bounce back up of +.3 to 34.9 hours. While this was a very strong report and much better than expectations on headline, there are still nearly 5 million fewer Americans employed vs. a year ago, while the labor force is down by 2.2 million.

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ADP Employment Report

The ADP Employment Report showed +517k private payrolls in March vs. consensus of +550k. This is the best read since last September, and now the second best since June of last year. Revisions saw January up +1k to +196, and February up another +59k to +176k. Within the report, goods-producing sectors added +80k, while service-producing added +437k. Leisure and hospitality, one of the largest hit industries since the start of the pandemic, rose a strong +169k, which is the best result since last June. Also stronger this month were trade/transport/utilities up +92k, healthcare up +66k, administrative/support +53k, manufacturing up +49k, and construction up +32k. Within the breakout of business, small businesses added +174k payrolls, mid-sized increased +188k, and large companies rose +155k.

Case-Shiller HPI

The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose +1.2% in January, putting the YoY change up +11.2%. The 20-City index rose by +1.2%, with its YoY rate up +11.1% from a revised +10.2% in the prior month. Every one of the 20 cities comprising the index saw gains for the month, ranging from the +1.9% rise in Phoenix (+15.8 y/y), +1.5% in Seattle (+14.3% y/y), and +1.4% in San Diego (+14.2% y/y). “January’s performance is particularly impressive in historical context,” according to Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The National Composite’s +11.2% gain is the highest recorded since February 2006, just one month shy of 15 years ago.

We feel bearish on the market as the 10-year is at 1.720%. We have resistance at 1.633%, while we have support at 1.77%, then at 1.951%. It is best to be safe and get those loans locked.

Call today to discuss this week’s market trends.

Pam Jamison

Loan Originator

NMLS# 277012

8310-1 N. Capital of Texas Highway, Suite 195, Austin, TX 78731

512-775-1001 | 512-582-8778

pam.jamison@primelending.com |

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