Steady Labor Market & Economic Shifts
This week delivered a full plate of major economic reports—covering everything from inflation and jobs to the overall pace of economic activity. Despite the flood of data, mortgage rates stayed relatively stable, with no dramatic surprises rocking the markets.
📈 Jobs Report: A Mixed Bag
The labor market showed signs of resilience. In April, the U.S. economy added 177,000 jobs—exceeding expectations of 130,000. However, downward revisions to job gains in previous months helped balance the scale. The unemployment rate held steady at 4.2%, and wage growth remained consistent with a 3.8% year-over-year increase in average hourly earnings.
📉 GDP Dips, But There’s Context
The first quarter of 2025 saw U.S. GDP shrink by 0.3%, falling short of the expected 0.4% increase. This marks the first contraction since early 2022 and comes after 2.4% growth in Q4 of last year. A 41% spike in imports—driven by businesses and consumers rushing to buy before new tariffs took effect—dragged GDP down by a significant five percentage points. Slower consumer and government spending added to the decline. On the bright side, the front-loading of imports could mean lighter import activity (and a potential GDP rebound) in upcoming quarters.
🔥 Inflation: Cooling, But Still on the Radar
The Fed’s preferred inflation gauge, the Core PCE Price Index, showed a year-over-year increase of 2.6% in March—down from 3.0% in the previous report. That’s the lowest level since March 2021, but still above the Fed’s 2.0% target, which hasn’t been hit since early 2021. With higher tariffs in the mix, future inflation data will be closely watched to gauge their impact.
🏡 What This Means for Buyers & Sellers
In short: While the economy shows some signs of cooling, the job market remains solid and inflation is easing—albeit slowly. Mortgage rates are holding steady for now, offering a bit of predictability in an otherwise shifting landscape.
Whether you're buying, selling, or just watching the market, understanding these economic indicators helps you make smarter, more informed decisions.
