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August 3rd, 2012

Job numbers rise, so should mortgage rates

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Job MarketThe latest jobs report shocked quite a few people Friday morning as the figures for July came in higher than expected.

According to the Bureau of Labor Statistics, 163,000 jobs were added last month, marking the highest month of job growth since February. The unemployment rate rose to 8.3 percent from 8.2 percent in June.

July’s job numbers, while still well below the figures needed to reduce the unemployment rate, were a breath of fresh air when you look over the reports from the last few months. May and June’s numbers were rather dismal, revised to 87,000 and 64,000, respectively.

Third quarter off to a good start?

“July’s numbers are a little bit better than we expected,” says Keith Gumbinger, vice president of HSH.com. “Relative to the last few months, there appears to be a pickup in activity in the third quarter.”

Earlier this week, we reported that the president of the European Central Bank stated that the ECB will do “whatever it takes to preserve the euro.” That statement indicated to investors that the ECB will and would pull out all the stops to preserve the currency.

Given the drag the European economy has had on the U.S., any improvement overseas means the U.S. won’t be pulled down as far, explains Gumbinger.

Mortgage rates

The increase in mortgage rates we reported on Tuesday (our Weekly Mortgage Rates Radar is a Wednesday-to-Tuesday wraparound weekly survey) was at least partially due to the easing of tensions and fear which have been pushing stock and bond markets around for months.  Currently, at least some investor money has shifted away from safe havens, pushing bond yields and rates a little higher. Friday’s jobs report should help ease investor tensions even more. The stock market certainly reacted positively following the release of the employment report.

We might end the week up a couple basis points from last week’s averages, explains Gumbinger. But what does that mean, really? “We’re simply wandering around the bottom as opposed to being stuck there.”

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One Response to “Job numbers rise, so should mortgage rates”

  1. Mortgage rates inch higher | Debt Settle Says: August 6th, 2012 at 10:58 am

    [...] « Job numbers rise, so should mortgage rates [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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