Last week’s Jobs Report for March showed that 120,000 jobs were created, with 121,000 private gains offsetting modest government job losses. This was nothing more than pure disappointment with expectations to at least exceed 200,000 job creations.
The Unemployment Rate did decline to 8.2%. On the surface that would be good news but it really doesn’t mean much in light of the unmet expectations of the Jobs Report last Friday. The reason for this is the Labor Force Participation Rate, which removes a lot of the guessing and adjustments of the unemployment rate. That figure is a concern because if the Labor Force Participation Rate continues to decline, it means we will see a smaller ratio of people working against the overall population. This only compounds the trillions in debt that continues to grow with no real solution to solving it.
The only good news to come out of the disappointing Jobs Report was bonds, including mortgage bonds which thrive on weak economic news. This impacted home loan mortgage rates as investors moved their money into what is seen as a safe haven of our bond market.
The bottom line is that now is a great opportunity to purchase a home, as home mortgage rates are near all-time historic lows.
This week investors will closely watch the Producer Price Index on Thursday and the Consumer Price Index on Friday. On Thursday the Initial Weekly Jobless Claims will be released which will be closely watched as well. Jobless claims fell to their lowest level in four years last week to 357,000.
In addition to the mentioned reports, corporate earnings will be announced during the week. The earning news will be closely watched and reactions will be like a pendulum. Good earning reports could shift the attention of investors back into stocks and away from bonds, which could impact home mortgage rates. Likewise, weak earning reports could push home mortgage rates much lower.