Quick Take: ADP Employment Survey, Mortgage Applications, Bernanke Testimony

April 2, 2008

By Lawrence Yun, Chief Economist

ADP Employment Survey

• Private payroll employment is expected to rise 20,000 to 25,000 this Friday,with data from the Bureau of Labor Statistics.
• ADP is a private firm that processes payroll checks and works with Macroeconomic Advisors to make projections as to what the government data may say - two days before the BLS release date.
• ADP projections have been off significantly in the past two months. It had projected modest increases in employment, when in fact, BLS reported employment cuts.
• We'll have to wait till Friday to get the most watched economic indicator - that on the job market conditions.

Mortgage Applications

• Refinance activity fell big time in the past week, dropping 38 percent. But the drop comes right on the heels of an 82 percent surge the prior week.
• Mortgages applications for home purchases also fell. They declined by 12 percent, following an 11 percent increase in the prior week. This indicator should correlate with home sales, though the relationship has not been very good last year.
• Compared to a year ago, mortgage purchase applications are down 12 percent. Home sales activity for both new and existing homes have been down much more than 12 percent.

Ben Bernanke Congressional Testimony

• He sees very slow or close to zero economic growth in the first half of the year, and a better performance in the second half of the year.
• He thinks most downward adjustments have already occurred - meaning any further declines will likely be less significant.
• He said monetary stimulus was provided - with no mention of needing a further cut in the Fed funds rate.

What does today's data mean for REALTORS® and consumers?

• The economy is essentially stalled, but the second half will be better. Even if the economy formally goes into a recession, it will be one of the mildest recessions.
• No more interest rate cuts by the Fed.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

Comments? Questions? E-mail NAR Research.