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Mortgage rates were higher over the past week, with the average 30-year fixed-rate ending the week at an ominous 6.66%. The labor market remained resilient, with job openings rising more than expected, private payroll growth modestly exceeding forecasts, and May’s employment report showing stronger-than-expected hiring while unemployment held steady. Mortgage application submissions declined as both purchase and refinance activity pulled back from the prior week. Construction spending posted a solid gain in April, while jobless claims were mixed, with continuing claims easing but initial claims moving higher. Consumer credit also increased more than expected, pointing to continued household borrowing activity.

Construction spending increased 0.4% month-over-month in April, exceeding expectations for a 0.3% increase and improving from the prior 0.2% gain.

Job openings on the Job Openings and Labor Turnover Survey (JOLTS) increased to 7.618 million in April, well above expectations for 6.860 million and higher than the prior reading of 6.887 million.
Mortgage application submissions slipped 2.5% during the week ending 5/29. The seasonally adjusted Purchase Index decreased 3% while the Refinance Index decreased 2% from the previous week.
The ADP Employment Report showed private payrolls increased by 122,000 in May, slightly above expectations for 118,000 and stronger than the prior gain of 105,000.

Continuing jobless claims were at 1,777,000 during the week ending 5/23, which was 8,000 lower than the previous week and slightly below expectations. Initial jobless claims were at 225,000 during the week ending 5/30, an increase of 13,000 from the prior week and above expectations for 214,000.

The employment situation report was generally stronger than expected in May. Nonfarm payrolls increased by 172,000, surpassing expectations for 85,000, while private payrolls rose by 120,000 and manufacturing payrolls added 7,000 jobs. Government payrolls increased by 52,000. The unemployment rate was unchanged at 4.3%, the participation rate held steady at 61.8%, and the average workweek remained at 34.3 hours. Average hourly earnings increased 0.3% month-over-month and were up 3.4% year-over-year.

Consumer credit increased by $20.73 billion in April, exceeding expectations for a $17.80 billion increase, though it remained below the prior month’s $22.23 billion gain.

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