Industry News
Mortgage Industry News
Job Gains Exceed Expectations
02/03/2012
The most significant influence on mortgage rates this week was Friday’s Employment report, which was much stronger than expected. Events in Europe have had less impact on US markets in recent weeks. While mortgage rates moved lower early in the week, they ended the week a little higher.
Friday’s Employment data exceeded expectations in nearly every area. Against a consensus forecast of 135K, the economy added 243K jobs in January, which was the highest level since April 2011. Revisions to prior months added an additional 60K jobs. The Unemployment Rate dropped to 8.3% from 8.5% in December, to the lowest level since February 2009. Strong labor market data is great news for the economy, but it increases future inflationary pressures, which is unfavorable for mortgage rates.
While mortgage rates ended the week higher than last week, the Freddie Mac weekly mortgage rate survey released on Thursday showed a large decline in rates. This is simply due to the timing of the survey. Freddie Mac collects data from origination companies on Monday and Tuesday and releases the results on Thursday. In this case, the survey captured the drop in rates following last week’s Fed meeting, but not the rise in rates due to this week’s strong jobs report.
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