Archive for 'Jobs'
Make A Mortgage Rate Plan BEFORE Friday’s Jobs Report
March 3rd, 2011. Published under Jobs. No Comments.
Mortgage rates could move higher beginning tomorrow morning. The Bureau of Labor Statistics releases its February jobs report at 8:30 AM ET.
Home buyers and rate shoppers would be wise to take note. The jobs report is almost always a market-mover.
Consider last month.
Although net job creation fell well-short of expectations in January — just 36,000 jobs were added — the national Unemployment Rate dropped to 9.0%, its lowest level in 2 years. The marked improvement surprised economists and sparked inflationary concerns within the investor community.
This, in turn, caused mortgage rates to rise.
In the days immediately following the jobs report’s release, conforming rates jumped 0.375 percent. That’s equivalent to a mortgage payment increase of $22 per month per $100,000 borrowed.
A similar spike could occur tomorrow.
Wall Street scrutinizes job growth because with more working Americans, there’s more consumer spending, and consumer spending accounts for 70% of the U.S. economy. A blow-out number tomorrow would change expectations for the future, and lead rates higher again.
The economy shed 7 million jobs between 2008 and 2009 and has barely made 1 million of them back. Tomorrow, analysts expect to see 183,000 jobs created. If the actual reading is lower-than-expected, mortgage rates should fall and home affordability will improve.
Anything else and mortgage rates should rise. Likely by a lot.
Therefore, if you’re shopping for a mortgage right now, consider your risk tolerance. Once markets open tomorrow, you can’t get today’s rates.
Unemployment Rate Drops To Lowest In 2 Years
February 4th, 2011. Published under Jobs. No Comments.
Americans are getting back to work. Sort of.
This morning, at 8:30 AM ET, the Bureau of Labor Statistics released its Non-Farm Payrolls report for January 2011. More commonly called “the jobs report”, the government’s data showed a large decrease in the number of working Americans as compared to December, but a sizable drop in the Unemployment Rate.
The job growth figures were much lower than consensus estimates:
- Expected job growth in January : +148,000 jobs
- Actual job growth in January : +36,000 jobs
January’s Unemployment Rate surprised analysts, too, but not in a bad way, falling from 9.4 percent in December to 9.0 percent last month. This is the nation’s lowest Unemployment Rate in nearly 2 years.
Today’s jobs report is rough news for home buyers and rate shoppers. Shortly after the report’s release, Wall Street is attributing the low jobs number to “bad weather” and is choosing to focus on the strong Unemployment Rate instead.
U.S. stock futures are now rising ahead of open, an increase that will come at the expense of the bond markets. Indeed, mortgage-backed bonds are losing this morning already.
Conforming mortgage rates are expected to start the day at least +0.125% from Thursday’s close and, if momentum continues, could tack on an additional +0.125% before today’s closing bell.
The government’s report is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.
The economy shed 7 million jobs between 2008 and 2009 and fewer than 1 million of those were recovered in 2010. It’s a data point Wall Street watches closely because more working Americans means more consumer spending, and more consumer spending means more economic growth. Consumers account for 70% of the U.S. economy, after all.
More workers also means more taxes paid to federal, state and local government, and, in theory, fewer loan charge-offs from banks. These, too, keep the economic engine moving forward, spurring more spending and job growth.
If you have not yet locked a mortgage rate, consider locking one today. On the heels of today’s jobs data, 30-year fixed rates will scratch at their highest levels of the year.
December’s Job Report : Good For Home Affordability
January 7th, 2011. Published under Jobs. No Comments.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report.
More commonly called “the jobs report”, the government’s data include raw employment figures and the Unemployment Rate.
The jobs report hit the wires at 8:30 AM ET today. It’s making big waves in the mortgage market and may help home affordability for buyers this weekend, and would-be refinancers.
For this month, and for the rest of 2011, employment data will figure big in mortgage markets.
7 million jobs were lost in 2008 and 2009. Fewer than one million jobs were recovered in 2010. For the economy to fully recover, analysts believe that jobs growth is paramount.
Consider how job creation influences the economy:
- More jobs means more income and more spending
- More spending means more business growth
- More business growth means more job creation
It’s a self-reinforcing cycle and, as business grows, the economy expands, pushing stock markets higher. This tends to lead mortgage rates higher, too, because bonds can lose their appeal when stock markets gain.
According to the government, 103,000 jobs were created in December, and October’s and November’s figures were revised higher by a net 50,000 jobs for a total of 153,000 new jobs created. Economists expected a net gain of 135,000.
The Unemployment rate fell to 9.4, its lowest level since mid-2009.
Wall Street is voting with its dollars right now. Mortgage bonds are improving, pointing to slightly lower mortgage rates today.
The December jobs report was “average”, and home affordability is improving.
August 2010 Jobs Report Pushes Mortgage Rates Higher
September 3rd, 2010. Published under Jobs. No Comments.
On the first Friday of each month, the Bureau of Labor Statistics releases Non-Farm Payrolls data for the month prior.
The data is more commonly called “the jobs report” and it’s a major factor in setting mortgage rates for homeowners everywhere. Especially today, considering the economy.
This is because, although it’s believed that the recession of 2009 is over, there’s emerging talk of new recession starting.
Support for the argument is mixed:
- Job growth has been slow, but planned layoffs touch a 10-year low
- Consumer confidence is down, but beating expectations
- Consumer spending is weak, but not declining
In other words, the economy could go in either direction in the latter half of 2010 and the jobs market may be the key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a “big ticket” items such as a home.
Jobs growth can provide tremendous support for housing, too.
Today, though, jobs growth was “fair”. According to the government, 54,000 jobs were lost in August, but that reflects the departure of 114,000 Census workers. The private sector (i.e. non-government jobs), by contrast, added 67,000.
In addition, net new jobs was revised higher for June and July by a total of 123,000. That’s a good-sized number, too.
Right now, Wall Street is reacting with enthusiasm, bidding up stocks at the expense of bonds — including mortgage-backed bonds. This is causing mortgage rates to rise. Rates should be higher by about 1/8 percent this morning.
Nervous About Mortgage Rates Rising? Lock Thursday — Ahead Of Friday’s Jobs Report
August 5th, 2010. Published under Jobs. No Comments.
Mortgage rates have been falling since April but that momentum could reverse tomorrow.
The Bureau of Labor Statistics releases the July jobs report at 8:30 A.M. ET Friday. With a stronger-than-expected reading, mortgage rates should rise, harming home affordability. Jobs are a keystone in economic growth and growth is tied to rates.
Earlier this year, job growth went positive and reached as far north as 431,000 jobs created in May. That figure slipped negative last month, however, as the temporary, decennial census workers left the workforce.
Jobs matter to the U.S. economy. Among other concerns, unemployed Americans spend less on everyday goods and services, and are more likely to stop payments on a mortgage. These effects retard the economy, spur foreclosures, and harm home values.
The reverse is also true. More workers means more disposable dollars and, in theory, a stronger economy.
Analysts expect that a net 65,000 jobs were lost in July. Wall Street — and Main Street — have a big interest in those results.
Poor jobs data would likely result in a stock market sell-off which would, in turn, boost the value of government-backed mortgage bonds. This is because bonds tend to perform well when the economy is sagging and higher bond prices mean lower mortgage rates.
Strong jobs data, however, would likely push stock markets up and bond markets down. This would cause mortgage rates to rise. The stronger the employment figures, the higher mortgage rates should go.
So, if you’re happy with where mortgage rates are today and you’re concerned about what the jobs report may do to them tomorrow, consider talking to your loan officer about locking your rate as soon as possible.
Once the jobs report is released, it may be too late.
June’s Jobs Report Wasn’t As Bad As The Headlines (And How You Can Take Advantage)
July 7th, 2010. Published under Jobs. No Comments.
In June, for the first time since December 2009, the U.S. workforce shrank.
According to the Bureau of Labor Statistics, the economy shed 125,000 jobs last month even as the Unemployment Rate dropped to 9.5 percent. The drop in the Unemployment Rate is being attributed to fewer Americans looking for work.
At first glance, the jobs report looks weak but a deeper look shows something different.
Excluding the 225,000 government Census workers that recently left the workforce, the total number of employed persons actually grew by 83,000 in June. That’s 50,000 more working Americans as compared to May.
And, since the start of the year, the U.S. workforce has grown by 857,000.
Jobs growth is closely tied to economic growth because more working Americans means more disposable income which, in turn, stokes consumer spending. Job growth is better than job loss.
Consumer spending makes up the majority of the U.S. economy so as consumer spending grows, investor mentality tends to shifts toward “return on principal” (i.e. stock markets) from “safety of principal” (i.e. bond markets).
A move like this is often bad for home affordability because falling demand for bonds is tied to higher mortgage rates. In addition, with the growing number of Americans earning a paycheck, demand for homes is likely to increase, thereby helping to push home prices higher.
Overall, therefore, the jobs report should be bad for rate shoppers and home buyers in. Except, the markets aren’t reacting that way. For now, mortgage rates are slightly improved since the jobs report’s release.
Perhaps Wall Street is watching the wrong figures, but don’t let that be your loss. If you’re shopping for a mortgage, a home, or both, now may be your best time to make a move; while rates are still low; with home prices down; before traders change their tune.
Because when markets change, it’ll likely happen fast.
