Friday, May 6, 2016

As rates remain low, borrowing on the rise

The average wage rose 8 cents in April to $25.53 per hour, according to the latest U.S. jobs report.

The U.S. April jobs report is in and it bears less than stellar news: only 160,000 new jobs added to the economy, much lower than the 200,000 jobs expected. While The Atlantic described it in a single word, "meh," the tradeoff is that jobs that were added are higher paying. Unemployment remained even at 5 percent.

The most positive news for job holders is that wages increased 8 cents an hour to a nationwide average of $25.53. Large job gains were seen in more "white collar" positions, i.e. tech-related industries. Wage growth has been considered a key benchmark to signify real economic improvement.

A poorer jobs report does translate to continued low interest rates. Lower rates encourage more loans and credit taken out, and as proof, consumer borrowing has hit its highest point in nearly 15 years. More borrowing also indicates stronger confidence in financial growth and ability to pay off future debt balances.

This month's job numbers make a rate hike by the Fed less likely at their June meeting. With higher home values and low interest rates, it's a great time to contact your Loan Advisor to see if you can take advantage of current market opportunities.