Why the Jobs Numbers were too good to be true – and what it means for mortgage rates….

by Tom on December 4, 2009
in Market Musings, Mortgage Rates

My initial reaction this morning to the jobs report was that it just sounded too good to be true. Well, here’s some of why it might appear that really is true…..

As usual, CR over at Calculated Risk has a more in-depth analysis of it, but I’m going to hit on just one main point. Let me quote directly from his piece:

Retailers only hired 54.2 thousand workers (NSA) net in October. This is essentially the same as in 2008 (59.1 thousand NSA). However retailers hired 321.3 thousand workers in November (NSA), an increase from the 233.7 thousand last year.

Retailers hired 321,300 workers in November. How many of them do you think will remain gainfully employed with the same employer once the holiday season is over? Yeah, that’s what I thought too – maybe 10% if we’re lucky?

So, take that 321,300 and add it to the 11,000 jobs lost and you’ve got a significantly different number.

The market started out with a big movement up for stocks and a blood bath in the mortgage rate market. As I’m writing this, the stock market is currently down 11.65 points after having been up as much as 150 plus points. While we haven’t seen any actual rate changes for the better yet today, the trend is definitely reversing itself.

I’m going to quote a friend of mine (and fellow mortgage lender and fellow mortgage blogger), Dan Green because he’s the first one I’ve heard say this actual saying: “Mortgage rates take the elevator up and the stairs down.”

What does that mean? It means that they went up (we lost .125 to .25% this morning) quite quickly, but I expect that they will regain at least some of that over the next period of days/weeks.

In the mean time, if you want to get specific rate information for your situation, fill out the quote form on the side and I’ll let you know what we can do!

Thanks!

Tom Vanderwell