U.S. Economic News

July 7, 2017

U.S. Economic Indicators

The U.S. economy added 222,000 jobs in June, above consensus.  The unemployment rate edged up to 4.4% as the labor force participation rate rose to 62.8%, and average hourly earnings rose 2.5% Y/Y.  BLS Report

U.S. News

Federal Reserve governor Jerome Powell says that the U.S. housing finance system is in drastic need of reform. In recent remarks, Powell called for Congress to encourage private investment into Fannie Mae and Freddie Mac in order to shield taxpayers from credit risk. WSJ

The Financial Times reports that Fed officials disagree about the timing of the reduction of the Fed’s balance sheet. While some officials believe that the Fed should wait until September to act, other officials say that the U.S. economy is at risk of overheating and the Fed should act sooner. FT

According to the Washington Post, mortgage rates have surged in recent weeks due to uncertainty regarding future moves by the Fed. Borrowing rates increased when the Fed confirmed that it will begin unwinding its massive balance sheet in the near future, which should have largely the same effect as a rate hike, though market watchers are unsure of the magnitude of the effect. WaPo