March will certainly roar out with a big week of news, beginning with Monday’s Personal Income and Personal Spending Reports. We’ll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed’s favorite gauge of inflation. Rest assured the Fed will be watching this report closely!
The Labor Market will also be in the spotlight, first with Thursday’s Initial Jobless Claims Report. Last week’s Initial Jobless Claims were reported lower than expectations and at the lowest reading in 6 weeks. The numbers show modest improvements and are somewhat encouraging.
Hopefully, Friday’s official Jobs Report from the Labor Department for March will also be encouraging. Last month’s report showed that 36,000 jobs were lost in February, which was better than the 68,000+ job losses that were expected. However, while the Unemployment Rate remained stable at 9.7%, a deeper look beyond the headlines of the report showed what many consider to be the Real Unemployment Rate to be near 17%…which includes discouraged workers who are no longer seeking employment, as well as “underemployed” folks who have taken part time or low paying jobs, just to be bringing some money in the door. The bottom line is that real improvement is needed in the labor market for our economy to continue to recover.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. And with the Fed MBS buying program ending…there will likely be more volatility for home loan rates in store.
As you can see in the chart, Bonds worsened last week, causing home loan rates to rise – and rates always go up much faster than they move lower. I’ll be watching closely to see what happens this week as March comes to a close – and please get in touch if I can be of any assistance in answering your questions on rates and current opportunities.
Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com