Market Trends Weekly - May 7, 2013

 

Unemployment Lowest Since Dec. 2008 The economic reports were pouring in last week, with several important data points released. Read on for details and what they meant for home loan rates. The Labor Department reported that nonfarm payrolls rose by 165,000 in April, above the 155,000 expected. The numbers for February and March were revised higher by 114,000, bringing the four-month average to 196,000.     May 7, 2013     Most of the gains in payrolls were concentrated in bars and restaurants, retail, and the professional and business services sectors. Job losses were found from the government due to spending cuts. The Unemployment Rate fell to 7.5 percent, the lowest level since December 2008 and down from the high of 10 percent in October 2009. However, the drop in the Unemployment Rate is due in part to the Labor Force Participation Rate (LFPR) being at a 35-year low of 63.3. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don't. The ratio of people "participating" or working is then compared to the total population. In other news, the Personal Consumption Expenditures (the Fed's favorite gauge of inflation) for March showed that inflation continues to remain tame. This likely influenced the Fed's decision in last week's meeting of the Federal Open Market Committee (FOMC) to continue purchasing $40 billion a month in Mortgage Bonds and $45 billion in Treasuries. The program should last through this year and could spill over into the beginning of 2014. What does this mean for home loan rates? In last week's FOMC meeting statement, the Fed noted that economic activity has been expanding at a modest pace but they continue to see downside risks to the economic outlook. Weak economic news typically causes investors to move their money from Stocks into Bonds as Bonds are seen as a safer investment. This includes Mortgage Bonds, to which home loan rates are tied, and this is why Bonds and home loan rates often improve when there is weak economic news. Recently, Bonds and home loan rates reached 2013 best levels due to some weak economic reports, but the better-than-expected Jobs Report last Friday gave Stocks a boost late last week--causing Bonds and home loan rates to move away from these best levels. Now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. Clinton Alcorn 480-614-5380 Clinton.Alcorn@carringtonms.com         Announcements   Complete this survey for a chance to win $100 Amazon.com Gift Card! Join our survey here and additional details. No purchase necessary, available for a limited time. Sweepstakes Official Rules   Your Carrington Loan Officer   Clinton Alcorn NMLS #: 964125 480-614-5380 Clinton.Alcorn@carringtonms.com  9364 E Raintree Drive Scottsdale AZ 85260     Economic Calendar This Week     After last week's full economic calendar, only one report is ahead. Weekly Initial Jobless Claims will be reported on Thursday. Last week, jobless claims fell to 324,000. This was below expectations and the lowest number since January 2008. In addition, the Treasury will be auctioning $72 billion in Notes and Bonds Tuesday through Thursday and this could impact the markets. 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.       Economic Calendar for the Week of May 06 - 10   Date ET Economic Report For Estimate Prior Impact Thu. May 9 08:30 Jobless Claims (Initial) 5/4 336K 324K Moderate                       © Copyright 2007-2013 Carrington Mortgage Services, LLC. headquartered at 1610 E. Saint Andrew Place, Suite B-150, Santa Ana, CA 92705. Toll Free # (800) 561-4567. NMLS Unique Identifier # 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.org. AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd #4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Corporations under the California Residential Mortgage Lending Act, File No. 413 0904. CO: Mortgage Company Registration # 2600 and Supervised Lender's Licenses # 989668 and # 989668-001.To check the license status of your mortgage loan originator, visit www.dora.state.co.us/real-estate/index.htm. GA: Georgia Residential Mortgage Licensee #22721. IL: Illinois Residential Mortgage Licensee. KS: Kansas Supervised Loan License # SL.0000313. 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