aid applications jump to 385,000
WASHINGTON –The number of Americans seeking unemployment aid rose last week by 28,000, the third straight increase.
Weekly applications increased to a seasonally adjusted 385,000, the Labor Department said Thursday. That’s the highest level since late November. The gain pushed the four-week average, a less volatile measure, to 354,250.
A Labor Department spokesman says the figures may have been affected by the Easter holiday. The department says the holiday’s timing varies from year to year, which makes it difficult to adjust for school closings and other seasonal factors that can alter the data.
Applications are a proxy for layoffs. They have declined steadily since November, pushing the average to a five-year low three weeks ago.
30-year mortgage rate slips to 3.54 pct.
WASHINGTON – Average U.S. rates on fixed mortgages crept closer to their historic lows this week, a trend that could help the housing recovery strengthen.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year fixed loan edged down to 3.54 percent from 3.57 percent last week. That’s near the 3.31 percent reached in November, which was the lowest on records dating to 1971.
The average rate on the 15-year fixed mortgage declined to 2.74 percent from 2.76 percent last week. The record low of 2.63 percent also was reached in November.
Low mortgage rates have contributed to a housing rebound more than six years after the bubble burst. Home sales and construction are up, prices are rising and more Americans are refinancing. That’s helped the broader economy.
Sales of previously owned homes in February reached the highest level in more than three years. Some of the demand has come from investors. Sales to first-time home buyers remain below healthy levels.
Some people are unable to take advantage of the low mortgage rates, either because they can’t qualify for stricter lending rules or they lack the money for larger down payment requirements.
There also is concern that the limited number of available homes for sale could slow sales at the start of the spring buying season.
The low supply and increased sales have helped drive prices higher. Home prices rose 10.2 percent in February compared with a year earlier, according to real estate data provider CoreLogic. The annual gain was the biggest since March 2006. Prices have now increased on an annual basis for 12 straight months, underscoring the recovery’s steady momentum.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year mortgages was unchanged at 0.8 point. The fee for 15-year loans also was steady, at 0.7 point.
The average rate on a one-year adjustable-rate mortgage edged up to 2.63 percent from 2.62 percent last week. The fee for one-year adjustable-rate loans rose to 0.4 point from 0.3.
The average rate on a five-year adjustable-rate mortgage fell to 2.65 percent from 2.68 percent. The fee declined to 0.5 point from 0.6.
The recent increases could be a sign that companies are starting to cut jobs, possibly because of steep government spending cuts that began on March 1. Earlier reports this week suggested that companies may have slowed hiring this month after four months of strong job growth.
Economists said they wanted to see more data before concluding the job market’s trajectory had changed.
“We suspect the surge in the last two weeks reflects seasonal adjustment problems more than any fundamental change in the trend, but of course that remains to be seen,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics, in a note to clients.
The government will issue the March employment report Friday. Economists forecast that it will show employers added 195,000 jobs last month, a healthy figure but below February’s total of 236,000.
Job growth has picked up in recent months. Employers added an average of 200,000 jobs per month from November through February. That’s nearly double the average from last spring. The gains helped lower the unemployment rate in February to a four-year low of 7.7 percent.
Stronger economic growth this year has spurred more hiring. A steady housing recovery has boosted home construction and prices. Higher home prices make Americans feel wealthier, which can spur more spending.
In February, consumer spending rose by the most in five months. And consumer confidence improved in March from the previous month, according to a survey released last week by the University of Michigan.
Two reports Wednesday, however, suggested companies may have grown more cautious last month. Services companies grew in March but at a slower pace than in February, according to the Institute for Supply Management, a trade group. Service firms, which include retailers, hotels, restaurants and financial companies, cut back on hiring and a measure of new orders fell.
And private employers added fewer jobs in March compared with February, according to payroll processor ADP. Construction firms didn’t add any positions after three months of strong gains.
Several economists lowered their forecasts for hiring in March after Wednesday’s reports. Still, many analysts cautioned that the ADP is not always an accurate predictor of the government’s more comprehensive figures.
Nearly 5.3 million people received unemployment aid in the week ended March 16, the latest data available. That’s about 170,000 fewer than the previous week.