The Economic Expansion Continues
The long road back from the Great Recession began in mid-2009 and July marked the 96th month of recovery. This makes it the third longest expansion on record and if we continue at the present pace, this recovery will become the second longest expansion in history in the middle of next year. There are two reasons for the length of this recovery. First, the Great Recession was a very deep recession, thus we had a very long road back.
Second, the recovery has been slow and steady. Even though our growth has not been strong, we have stayed out of a recession partly because the economy has not overheated. If the economic expansion did heat up, then interest rates would be much higher and this could endanger the recovery. We have enjoyed very low interest rates for the past decade — and this year is no exception.
Nowhere is the length of the recovery more evident than the jobs market. The economy lost close to nine million jobs in a very short period of time. In the decade that has followed, we have added approximately 17 million jobs. While these are really strong numbers, we have only added eight million jobs net of the recession, and this averages out to less than one million per year over the past decade. This helps us put July’s job numbers in perspective. We added just over 200,000 jobs for the month with an unemployment rate of 4.3%, both solid numbers. We still have some work to do in creating better paying jobs and taking care of those who have left the workforce but did not retire. However, we have come a long, long way.
The Weekly Market Update
Rates were stable in the past week. For the week ending August 3, Freddie Mac announced that 30-year fixed rates rose slightly to 3.93% from 3.92% the week before. The average for 15-year loans decreased to 3.18%, and the average for five-year adjustables moved down to 3.15%. A year ago, 30-year fixed rates averaged 3.43%.
Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield was relatively flat this week, as was the rate on 30-year fixed loans, which rose 1 basis point to 3.93 percent. Despite a strong advance estimate for second quarter GDP, markets are erring on the side of caution.”
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.