

For many years during and after the recession, the monthly jobs report was important to gauge the strength of the recovery. However, during the past two years, the release of the report has taken on a new meaning. Now we are not only measuring the strength of the economy, but also tying that information directly to actions by the Federal Reserve Board’s Open Market Committee. If we added 250,000 jobs in a particular month five years ago, that was good news. But we did not have to worry about the Fed raising interest rates as a result of that information. Today, a strong report can lead us to direct action by the Fed.
And so it is with the report which came out on Friday. The increase of jobs of 138,000 and the revision of last month’s data was seen as weakness. However, the unemployment rate moved to 4.1%, another post-recession low, and monthly wage growth came in at forecast. The question at this point is — are we approaching full employment, which means we are also experiencing a shortage of labor? This information, taken together with the previous month’s report, tells us that there is still a decent chance that the Fed will act when they meet next week, but slightly less of a chance than before the report was released.
The meeting will also be accompanied by the release of economic projections which will give us a gauge of where the Fed thinks that the economy is heading in the next several months. Keep in mind that the Fed will be considering other information which measure the strength of the economy. For example, on Tuesday last week, measures of personal income and spending for April came in with moderate strength following weak readings in March. Until the Fed meets next week, we can’t say exactly how they will react, but certainly the data we saw last week give us some important clues.

June 2, 2017
Daily Value | Monthly Value | |
June 1 | April | |
6-month Treasury Security | 1.07% | 0.95% |
1-year Treasury Security | 1.16% | 1.04% |
3-year Treasury Security | 1.45% | 1.44% |
5-year Treasury Security | 1.76% | 1.82% |
10-year Treasury Security | 2.21% | 2.30% |
12-month LIBOR | 1.780% (Apr) | |
12-month MTA | 0.732% (Apr) | |
11th District Cost of Funds | 0.645% (Apr) | |
Prime Rate | 4.00% (Apr) |


Almost half of young American home buyers are opting to live in suburbs compared to 33 per cent choosing an urban lifestyle and 20 per cent living in rural areas. Research from Zillow shows that millennials made up 42 per cent of homebuyers in 2016, making them the single largest generational group, and most of them were first time buyers. They are also loyal to their city with 64 per cent remaining in the same city when they move; just 7 per cent moved state in 2016. Starter homes are less attractive for today’s young buyers; they want similar homes to those that older generations buy and will pay a median $217,000 for a 1,800 square foot house. “Millennials have delayed home buying more than earlier generations, but don’t underestimate their impact on the housing market now that they’re buying,” said Jeremy Wacksman, Zillow Group chief marketing officer. “As members of this huge generation start moving into the next stage of life, expect the homeownership rate to tick up and suburbs to change to suit their urban tastes.” Source: Zillow
There was a 12% increase in business activity in 2016 among members of the National Association of Realtors® but there is disparity in their finances. The association’s latest Member Profile report shows that a typical member saw gross income increase, with a median 8% rise. They also saw the highest number of transactions in recent years. Transactions hit an average 12 per agent despite the pressure of tight inventories; that’s the highest since 2014 when the average per agent was 11. Sales volume grew to a median $1.9 million, up $100,000 from the previous year and median income was up to $42,500 in 2016 from $39,200 in 2015. Gross income for 2016 was a median $111,400, up from $98,300 in 2015. However, the figures show that 24% of NAR members made less than $10k while another 24% made more than $100,000. “The return of pre-recession market levels and rising home sales and prices have led to increased business activity among Realtors. It is a highly entrepreneurial business, with some members earning six-figure incomes while others were barely scratching out less than $10,000,” said NAR chief economist Lawrence Yun. Experience makes a big difference for typical real estate agents. The NAR data shows that those who make the most (median $78,850 in 2016) had been in business for at least 16 years. Those who made the least ($8,930 median) had been in business for less than 2 years. There continues to be a steady stream of new entrants to the industry with those with less than 2 years making up 28% of NAR members in 2016 while 20% of members had less than 1 year of experience. Meanwhile, those aged 60 or over made up 30% of NAR members and the median age of a Realtor was 53. “It has become evident over the last few years that individuals are realizing the many benefits and business opportunities that working in real estate provides,” said NAR President William E. Brown. Source: NAR