On Friday, the Labor Department Jobs Report reported that 227,000 jobs were created in February, with 233,000 private job gains offsetting slower government job losses. In addition, the Unemployment Rate held steady at 8.3%. This bode well for the good economic news but it’s important to note that wage growth continues to lag even the minimal amount of inflation we are experiencing right now. In addition the negative earnings growth, compounded with consumers still de-leveraging debt makes it quite difficult for the economy to grow at a pace robust enough to significantly make any dent in the unemployment rate. This mix of news makes the good news okay and actually benefited Bonds and home loan mortgage rates.
Going into this week there are several economic reports that will be released:
- Tuesday’s Retail Sales data will provide a glimpse into consumer spending. Consumer spending makes up almost 70 percent of Gross Domestic Product, so spending decisions will surely influence the direction of the U.S. economy.
- Thursday we get the Empire State Index from New York and Philadelphia Fed Index.
- Initial Jobless Claims will be released on Thursday. We are at a four year low of people filing for unemployment benefits.
- Friday, the Industrial Production will be delivered.
- Also on Fridy we get the Consumer Sentiment report.
On Tuesday afternoon the Fed’s statement will be released and depending on what is said in that statement could impact Bonds and home loan rates.
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 a great time to purchase a home, as home loan rates still are near historic lows. If we can help answer any questions at The Hoffman Group we would be glad to help you.