Economic update for the week ending March 9, 2019

February job growth stalls with only 20,000 new jobs added - The Labor Department reported that just 20,000 new jobs were added in February. It marked the fewest jobs added since September 2017. Experts predicted 180,000 new jobs. Considering January’s job growth was so robust, we have still added about 325,000 jobs for the year. 

The unemployment rate dropped to a 50 year low of 3.8%. Average hourly wages grew 3.4% from last February, the highest year over year increase in wages since the expansion began 10 years ago. 

Stocks down for the week - Fears of slowing global growth weighed heavily on investors as stock markets closed lower every day this week. The Bank of Canada, European Central Bank, and the Chinese government all acknowledged that their economies had slowed and took measures to boost their economies. The Dow Jones Industrial Average closed the week at 25,450.24, down 2.2% from 26,026.32 last week. It’s up 9.1% year to date. The S&P 500 closed the week at 2,743.07, down 2.2% from 2,803.69 last week. It is up 9.4% year to date. The NASDAQ closed the week at 7,408.14, down 2.5% from 7,595.35 last week. The NASDAQ is up 11.6% year to date. 

Treasury Bond Yields up sharply this week - The 10-year treasury bond closed the week yielding 2.62%, down from 2.76% last week. The 30-year treasury bond yield ended the week at 3.00%, down from 3.13% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

30-year mortgage rates slightly higher in survey, but rates dropped at end of the week - The March 7, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.41%, up from 4.35% last week. The 15-year fixed was 3.83%, up from 3.77% last week. The 5-year ARM was 3.87%, almost unchanged from 3.84% last week. Next week’s rates should be closer to last week’s rates. 

Revitalization and Development in Downtown Los Angeles!

Just a little over a decade ago, Downtown Los Angeles (DTLA) was merely a sleepy office district, where tens of thousands of office workers would go to work during the day and clear out by dusk. Many of the classic Beaux-Arts and Art Deco buildings were abandoned and sat empty. The area didn't even have a grocery store until Ralphs opened approximately 10 years ago.

Today, you see cranes and construction around every corner of the 5.85 square mile area, and the nightlife is bustling with new restaurants and bar openings every month. New buildings are being constructed, existing structures are being renovated, and the public transportation continues to be expanded and improved.

There is a new generation of residents living in DTLA now, and they love the urban lifestyle, the walkability, and the lack of commute to work. According to the business improvement district's year-end market report in 2018, the current construction projects will add more than 7,000 new residential units, and over 35,000 are in the works. Additionally, almost 3 million square feet of office space is under construction and another 3.3 million square feet is in the pipeline.

With the Olympics coming to Los Angeles in 2028, the pace of development and construction over the next 10 years will likely continue to grow. The city's long term vision projects 125,000 residents, 70,000 residential units, and 55,000 jobs in the area by 2040.

Downtown Los Angeles seems to be a great long term investment in 2019 and there is so much opportunity for growth.

Contact me via phone/text at (310) 717-1321 or email at JamieTian@gmail.com if you are interested in finding more about property values in Downtown LA!

Economic Update For The Week Ending March 2, 2019

Stocks ended the week slightly higher - Gains in January and February marked the best two month start of a year since 1987 - This week the March 1 deadline for a deal with China on trade was officially extended as both sides announced that progress has been made. The fourth quarter GDP, the broadest measure of economic output, came in at 2.6%. It was feared in the fourth quarter of 2018 that tariffs, slowing economies overseas, and higher interest rates were slowing the economy. While 2.6% did represent a slowing in the economy, it was slightly higher than what analysts expected. For the full year, GDP rose 2.9%.  For some reason treasury bond Investors pulled back on purchases and yields rose about .10% this week. That will cause mortgage rates to rise about 1/8%-1/4% after almost three months of steadily dropping.

The Dow Jones Industrial Average closed the week at 26,026.32, unchanged from 26,031.81 last week. It’s up 11.6% year to date. The S&P 500 closed the week at 2,803.69, up 0.4% from 2,792.67 last week. It is up 11.8% year to date. The NASDAQ closed the week at 7,595.35, up 0.9% from 7,527.54 last week. The NASDAQ is up 14.5% year to date. 

Treasury Bond Yields up sharply this week - The 10-year treasury bond closed the week yielding 2.76%, up sharply from 2.65% last week. The 30-year treasury bond yield ended the week at 3.13%, up from 3.02% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

30-year mortgage rate at lowest level in one year, but rates rose at the end of the week - The February 28, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.35%, unchanged from 4.35% last week. The 15-year fixed was 3.77% almost unchanged from 3.81% last week. The 5-year ARM was 3.84%, unchanged from 3.84% last week. Rates rose late in the week. Next weeks rates will be higher. 

February employment numbers will be released next Friday. They will be included in next weeks report!