Employment report data increases mortgage rates
9 March 2007
Bonds were sharply down today following the release of the Labor Department’s Unemployment report.ﾃつ ﾃつ The bond is currently down 18/32, and we can expect to see rates increase 25 basis points.
The Employment repor showed that unemploymen rate in the US showed a slight drop of .1%, down to 4.5% , and 97,000 new jobs added, close to the forecasted figure of 100,000.
However, an increase in January payroll of 35,000 demonstrated that more jobs were created in January than had been expected. ﾃつ Bad news for bonds and mortgage rates.
Average earning reading showed a larger increase than expected, as earnings ros .4% last month.ﾃつ This causes concerns that higher wages will contribute to inflation.
Considering the rally in bonds recently, the bearish reaction to this report is understandable in the bond markets sensitive in price to any sign that the economy is strong.
Looking forward to next week, we will see a inflation indexes and retail sales data reports that may have the most power to influence mortgage rates.
Current home loan shoppers are recommended to lock-in now.
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