December Job Growth Blows Past Estimates
Job growth in December exceeded expectations, with nonfarm payrolls rising by 256,000, surpassing the forecasted 155,000. The unemployment rate decreased to 4.1%, while broader unemployment metrics also showed improvement. The report led to a drop in stocks and a rise in Treasury yields as traders anticipated fewer Federal Reserve rate cuts. Wage growth was modest, indicating that labor market inflation is stabilizing. Overall, the labor market remained strong, contributing to expectations that the Fed might hold off on further rate cuts this year.
Biden Passes New Ban On Offshore Drilling
President Joe Biden announced a ban on new offshore oil and gas drilling across 625 million acres of U.S. waters, including parts of the Atlantic, Pacific, Gulf of Mexico, and Alaska’s Bering Sea. This move aims to safeguard the environment and counter potential energy policies under President-elect Donald Trump. Biden utilized the Outer Continental Shelf Lands Act to protect these areas indefinitely, building on a similar but smaller action by former President Obama. The decision is seen as a significant win for environmentalists and positions Biden as a leader in ocean conservation. This protection effort is also intended to mitigate risks highlighted by past disasters like the 2010 Deepwater Horizon spill.
Mortgage Rates Rise
Rates on 30-year mortgage loans increased to 7.18%, nearing the peak levels seen in late December. These rates have climbed significantly since hitting a two-year low of 6.01% in September. Other refinance loan types showed mixed movements, with some holding steady and others seeing slight decreases or increases. Various macroeconomic factors, including bond market trends, Federal Reserve policies, and lender competition influence mortgage rates. Recent Fed actions, such as reducing bond purchases and adjusting the federal funds rate, have contributed to the upward trajectory of mortgage rates over the past two years.