Posts Tagged ‘unemployment claims’

Market recap for week ending 5/03/2013

Posted on: May 3rd, 2013 by Fred Bohman No Comments

At the time I am writing this, mortgage interest rates are less than 1/8th of a percent higher than they were last Friday.

There was a lot of financial news this week. The Federal Reserve Board (FED) had their Federal Open Market Committee (FOMC) on Tuesday and Wednesday. After the meeting they came out with a policy statement. Their statement said that the economy is still not growing at the pace they want to see so they will continue their assets purchase program to try and stimulate the economy. This is good news for interest rates since they are purchasing mortgage bonds which causes interest rates to stay low. Another topic brought up in their statement was deflation. Up until this point there has been concern that the continued printing of money would cause inflation, but now that concern has flipped. Deflation means that goods are becoming less expensive compared to the dollar. This might sound like a good thing, but it can actually cause problems in the economy.

Yesterday the European Central Bank(ECB) lowered their base lending rate from 0.75% to 0.5%. At this point most of the Euro zone is back in a recession and the lowering of the rate is an attempt to stimulate the economy.

This week was employment week with the unemployment claims on Thursday and the employment report on Friday. The unemployment claims figure showed that claims dropped 18K. The employment report showed that unemployment rate dropped to 7.5% from 7.6% rate. The job creation numbers were stronger than expected especially since the ADP estimates earlier in the week were low. The report was a surprisingly strong report compared to most other economic report lately that have been showing the economy softening. This was a setback for rates, but I believe we might see more negative reports next week which will help out rates again.

Market recap for week ending 4/26/2013

Posted on: April 26th, 2013 by Fred Bohman No Comments

At the time I am writing this, mortgage interest rates are less than 1/8th of a percent lower than they were last Friday.

This week was a slow week in terms of important economic reports. Mortgage rates have been stuck in a narrow range for the past 3 weeks with not much change. The 10 year Treasury bond yield has tested the resistance at 1.70% several times but has not managed to close below it. The jobless claims report was released yesterday and claims were down 16k. This report was in line with analyst estimates and thus not much of a market mover.

Today the advanced Q1 Gross Domestic Products (GDP) report came out. The report is an early indicator of what the actual report will look like and is used as tool to measure the growth of our economy. The numbers came in lower than what was expected by analysts, but it did not have much impact on the markets. In order to break out of this narrow range we have been stuck in we will need some big economic news, either positive or negative. Until that time expect rates to stay stable at current levels.

Market recap for week ending 4/12/2013

Posted on: April 12th, 2013 by Fred Bohman No Comments

At the time I am writing this, mortgage interest rates are less than 1/8th of a percent higher than they were last Friday.

This week was a slow week in terms of important economic reports. Yesterday unemployment claims came out and it showed that claims dropped 42K, but last weeks were revised 28k higher. The big swing in the numbers was blamed on the Easter holiday. As I mentioned last week our current system of measuring unemployment is not very accurate as it does not included people who are under employed and have given up on looking. As far as interest rates goes unemployment is still the most important economic indicator to keep an eye on.

Another report that came out today was March retail sales which showed that consumer spending has slowed. This is good news for rates as our economy is driven by consumer spending. Not much news out of Europe this week compared to the last few weeks. Looking forward I think rates will still increase, but in the short run I would urge consumers to take advantage of this dip we are currently seeing.

Market recap for week ending 4/4/2013

Posted on: April 5th, 2013 by Fred Bohman No Comments

At the time I am writing this, mortgage interest rates are less than 1/8th of a percent lower than they were last Friday.

This week was employment week with ADP employment estimates on Wednesday and the official numbers today. The unemployment figures released today showed that the unemployment rate had dropped, but the job creation numbers were only about half of the estimates. The drop in the unemployment rate was most likely to people giving up or taking part time jobs thus decreasing the rate. The way we calculate the unemployment rate is widely known for being flawed and the actual rate is much higher. Also on Thursday the unemployment claims figures were released and claims increased for the first time in a few months.
The Federal Reserve (FED) president Ben Bernanke has stated that they will continue to keep rates low as long as unemployment rate is above 6%. During the last few months unemployment had actually been going down, but this week’s reversal is good news for interest rates.

Also in the news this week has been North Korea and their threats of nuclear war. I don’t think many people other than the media are taking them seriously, but it still might cause some investors to get nervous and move money to bonds which will be good for rates.

For the last few months it has looked like our economy was getting back on track and the outlook for rates was higher. With all the negative news over the last 2 weeks that trend has reversed and it appears that we will be able to enjoy these low rates for a while longer. I would caution those borrowers looking for even lower rates to not wait too long and miss the boat on these low rates.

Market recap for week ending 03/15/2013

Posted on: March 15th, 2013 by Fred Bohman No Comments

At the time I am writing this, mortgage interest rates are less than 1/8th of a percent lower than they were last Friday.

More positive economic news this week, putting upward pressure on interest rates. On Wednesday the February retail sales report was released and it came in better than expected. The fact that consumers are spending money shows that the economy is getting back on track. On Thursday the unemployment claims figure was released and it also came in better than expected. The 4 month average of claims hit a 5 year low. We also saw some positive numbers out of Europe. The European economy is still shrinking but it looks like they will be on the road to recovery as early as next year.

Once again as the economy is showing signs of recovering it gives the Federal Reserve (Fed) less reason to keep rates low. Fed President Ben Bernanke has stated that they will continue to deflate interest rates through their quantitative easing program as long as unemployment is high. The reports coming out the last two week is showing that unemployment numbers are improving. I don’t think the Fed will end their QE program any time soon, but it might be sooner than what was previously expected.

Today we did see some negative economic reports which temporarily reversed the upward trend on rates. Dips like today’s should be used to lock in rates. Look for interest rates to slowly increase as the economy continues to improve. There will be dips along the way since the market never moves in straight line, but the long term outlook for rates is not good.