Economic Snapshot: Fed chair says no rate hike for now

After a disappointing unemployment report last week that showed only 38,000 new jobs, the Federal Reserve seems unlikely to raise interest rates in the short term.

Janet Yellen, chairwoman of the Federal Reserve, spoke earlier this week at the World Affairs Council of Philadelphia, affirming that the central bank won’t be raising short-term interest rates in the wake of what she called a “concerning” jobs report and “considerable uncertainty about the economic outlook.”

Yellen emphasized that rates are still likely to go up in the future, as the Fed still expects the economic recovery to continue.

“The economic expansion following the Great Recession has now been under way for seven years,” Yellen said. “The recovery has not always been smooth, but overall, the gains have been impressive. In particular, the job market has strengthened substantially, and I believe we are now close to eliminating the slack that has weighed on the labor market since the recession.”

In other news, it was a relatively slow week.

Housing

On the housing front, there were a few minor, but positive reports.

Mortgage applications were up 9.3 last week, the Mortgage Bankers Association reported. Refi applications increased 7 percent and are up 14 percent from a year ago. Applications for new home purchases were up 12 percent for the week, but are down 6 percent from 2015.

Foreclosure starts were the lowest on record in April, pointing to a healthier housing market, Black Knight Financial Service said in its monthly Mortgage Monitor.

Finally, home prices were up 6.2 percent year-over-year in April, according to CoreLogic. Home prices were up 1.6 percent from March. CoreLogic is forecasting that home prices will increase 5.3 percent from April 2016 to April 2017.

Labor market

There was little change in job openings and hires in April, the Bureau of Labor Statistics reported. The number of job openings was little changed at 5.8 million on the last business day of April, while hires edged down to 5.1 million and separations were little changed at 5.0 million. Within separations, the quits rate was 2.0 percent, and the layoffs and discharges rate was 1.1 percent.