The Labor Department reported that 148,000 new jobs were created in September, below the 183,000 expected. For July and August, the numbers were revised higher by a total of 9,000 jobs. The Labor Force Participation Rate, a measure of how many people are looking for work, was unchanged at 63.2 percent after falling in August to a 35-year low. The Unemployment Rate hit a 5-year low in September, falling to 7.2 percent. This was fueled to some degree by workers entering retirement and those Americans opting out of the workforce in a stagnant job market. And in the latest Weekly Initial Jobless Claims Report, claims fell by 12,000 in the latest week but still came in above expectations. The bottom line is that we are simply not seeing any meaningful improvement in the labor market. What did this mean for home loan rates? Remember that weak economic news normally causes investors to move their money into safe investments like bonds. This includes mortgage bonds, to which home loan rates are tied. We saw that dynamic in the markets last week, as bonds rallied after the weak Jobs Report was released, helping home loan rates reach their lowest levels in four months. Also still helping bonds and home loan rates is the Fed’s current Quantitative Easing program, in which the Fed has been purchasing $85 billion in bonds and Treasuries each month to stimulate the economy and housing market. With key economic reports delayed due to the shutdown, and with the September Jobs data weaker than expected, there is not much chance the Fed will taper its purchases at its meeting this week. This should help keep home loan rates attractive through the remainder of 2013. Home loan rates remain attractive compared to historical levels and now remains a great time to consider a home purchase or refinance. Forecast for the week This weeks economic calendar is packed with a number of reports that will give investors a broad look at the U.S. economy. •At the beginning of the week the Pending Home Sales and S&P/Case-Shiller Home Price Index reports were released. •Also released were the Retail Sales for September and Consumer Confidence for October and the wholesale-measuring Producer Price Index. •The middle of the week brings the Consumer Price Index and the ADP Employment Report. •Ending the week will bring the Weekly Initial Jobless Claims manufacturing data from the Chicago PMI and the ISM Index. In addition, the next regularly scheduled meeting of the Federal Open Market Committee is Tuesday and Wednesday, with the Policy Statement set to be released Wednesday. Investors will be looking for any mention of when the Fed may taper its bond purchases, and this news could move the markets
Posted on: Wed, 30 Oct 2013 19:09:25 +0000
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