Job numbers rise, so should mortgage ratesby Tim Manni
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.
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.”