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Against a consensus forecast of 140K, the economy added 175K jobs in February, and the figures for the prior two months were revised a little higher. This took place, according to the Bureau of Labor Statistics, despite the largest weather related disruption since 1996. The Unemployment Rate unexpectedly rose from 6.6% to 6.7%, but this was due to an increase in the number of people that entered the labor force. The solid jobs report exceeded expectations nearly across the board. Since stronger economic growth raises future inflationary pressures, this was unfavorable news for mortgage rates. After Russia moved troops into Ukraine, the threat of an escalating conflict caused a “flight to safety” in financial markets on Monday. This involved a shift by investors to relatively safer assets, resulting in a large decline in stocks and significant improvement in bonds, including mortgage-backed securities (MBS). A complete reversal took place on Tuesday, however, after the Russian President said that Russia would not use military force in Ukraine.
WEEK AHEAD |
Posts Tagged ‘economy’
not always early, but ALWAYS on time….MORTGAGE TIME!
March 10, 2014Tags:Bay Area economy, Caldecott, Caldecott Properties, Caldecott.com, economy, exisiting home sales, Home Sales, Investors, mortgage, mortgage options, Mortgage Rates, oakland real estate, pending home sales, Russia, Ukraine, unemployment rate
Posted in Bay Area Real Estate, Oakland, Uncategorized | Leave a Comment »
it’s a little late…yet still on time! MORTGAGE TIME
February 25, 2014
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The Minutes from the January 29 Fed Meeting revealed that Fed officials remained very divided as to the appropriate path for future policy. Overall, though, the perception of investors was that the position of the hawks remained solid, while the views of the doves may have weakened a little. As a reminder, “hawks” tend to favor less stimulus to help keep inflation low, while “doves” prefer more stimulus to boost economic growth. The Minutes stated that “a few participants” considered the possibility that it “might be appropriate” to raise the fed funds rate sooner than many expect. The Minutes also reinforced Fed Chair Yellen’s recent comments that there is a high hurdle for the Fed to pause in reducing its bond purchase program. The Fed’s bond purchases have helped keep mortgage rates low, and the Minutes reduced the likelihood that the program could be stretched out for a longer period of time. The economic data released this week continued to be affected by the unusually severe weather this winter. In particular, the housing reports all fell short of expectations. January Existing Home Sales declined 5% from December to the lowest level since July 2012. They were 15% below the peak levels seen last summer. On the plus side, total housing inventory available for sale increased. The results for January Housing Starts fell even farther below expectations with a decline of 16% from December. Building Permits declined as well. Finally, the February NAHB/ Wells Fargo Housing Market index showed that builder confidence dropped sharply. Both the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) attributed the weakness in recent data to a combination of bad weather, limited supply, and tight credit conditions.
WEEK AHEAD |
Tags:Bay Area economy, Caldecott, Caldecott Properties, Caldecott.com, economy, exisiting home sales, Home Sales, Investors, mortgage, mortgage options, national association of home builders, oakland real estate, pending home sales
Posted in Bay Area Real Estate | Leave a Comment »
What time is it? It’s Mortgage Time.
February 11, 2014
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Both the Employment report and the ISM Manufacturing data saw big misses. Against a consensus forecast of 185K, the economy added just 113K jobs in January. Also disappointing, many investors had hoped to see a large upward revision to the weak December reading, but it was little changed. The ISM national manufacturing index declined sharply to 51.3, far below the consensus of 56.0. For perspective, the increase in jobs reflects improvement in the labor market, and readings above 50.0 indicate an expansion in the manufacturing sector. The issue is that the pace of economic growth has slowed. The relatively minor impact of this week’s data must be considered in light of the performance of the stock and mortgage markets so far this year. Entering the week, stocks had experienced significant losses, as the Dow was down roughly 5% in January. Similarly, mortgage rates have seen significant improvement since the start of the year. To some degree, investors were already positioned for weak data this week. In addition, questions about the effect of unusually severe weather caused some investors to question how accurately recent data reflects the underlying strength of the economy.
WEEK AHEAD |
Tags:Bay Area economy, Caldecott, Caldecott Properties, Caldecott.com, economy, employment report, mortgage, mortgage market, mortgage options, stock market, unemployment rate
Posted in Bay Area Real Estate, Oakland | Leave a Comment »