Inside This Week’s Market News: The Jobs Report

Civilian Unemployment RateLast week, the Labor Department’s April Jobs Report stated that 115,000 jobs were created in April, down 47,000 from expected levels near 162,000. Despite this negative information, the report did revise March’s Jobs Report to add 53,000 more jobs than what was previously reported.

As the unemployment rate dropped to 8.1% last week, the lowest since January 2009, the Labor Force Participation rate (the ratio between the labor force and the overall population size between the same age range) fell to 63.6, it’s lowest levels since December of 1981. It remains difficult to pay down debt with a weak labor force. Additional Bond buying (Quantitative Easing) will have a limited effect on spurring additional job growth with the recent underwhelming Jobs Report.

Forecast

After the last two weeks of economic reports, the upcoming week will seem quiet in comparison. The week’s first report, the weekly Initial Jobless Claims report, will be released this Thursday. With claims falling by nearly 30,000 last week, the largest decline since May of 2011, this report will be closely watched.

The Producer Price Index (PPI), which reports the level of inflation at the wholesale level, will be released this Friday along with the Consumer Sentiment for May.

The underwhelming Jobs Report, in addition to the continued debt news coming out of Europe, means that home loan rates are remaining near historic lows. Remember, weak economic news normally causes money to flow out of stocks and into bonds, helping bonds and mortgage loan rates to improve. Strong economic news normally has the adverse affect.

The bottom line is that now continues to be an excellent time to purchase a new home, as home loan rates still are near historic lows. If we can answer any questions for you please contact us, we would be glad to help you.

Graph: Data source: Haver Analytics courtesy of www.bloomberg.com

The material provided is for informational and educational purposes only and should not be construed as legal, investment and/or real estate advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.



 

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