GDP Surges, Labor Holding Steady, Rate Bounce Around, then Come Back

August 4, 2014 at 6:21 PM

Surprise! Surprise! While the Jobs Report for July didn't feature any major surprises, the second quarter Gross Domestic Product reading sure did. Here's what you need to know.

The Labor Department reported that 209,000 new jobs were added in July, while the numbers for May and June were revised higher by 15,000. Through the first seven months of 2014, job creations have averaged 230,000 jobs per month, enough for the U.S. economy to continue to grow. While the Unemployment Rate ticked up a hair to 6.2 percent, overall this was a decent report and a good sign for the labor markets.

Also, as expected, the Fed announced that it will taper its big Bond-buying program by $10 billion total. This means that the Fed will now purchase $10 billion in Mortgage Bonds and $15 billion in Treasury Securities each month. The Fed has been steadily tapering these purchases throughout the year. As we head into the fall, it will be important to see how further tapering may impact Mortgage Bonds—and therefore home loan rates, which are tied to Mortgage Bonds.

Sign Up for E-News

There weren't any major surprises in the housing sector, as the Case Shiller Home Price Index rose by 9.3 percent in May on an annualized basis, the slowest pace in more than a year. From April to May, there was a 0.3 percent decline, the first monthly drop since January 2012. Price gains continue to move down to more normal levels after the big gains seen in 2013. 

That leads us to the big surprise of the week. The first reading of second quarter Gross Domestic Product (GDP) surged by 4 percent, well above the -2.1 percent final reading for the first quarter. This is significant because GDP is the broadest measure of economic activity, and at first glance it's a great sign for our economy. However, it's important to note that this is the first of three readings and it is based on data that is incomplete or subject to further revisions by the Bureau of Economic Analysis. We will have to see what future reports bring as the second half of the year continues.

The bottom line is that home loan rates remain near some of their best levels of the year and 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.

After last week's jam-packed calendar, this week's economic report schedule is on the light side.

On Tuesday, the ISM Services Index for July will be released.
Jump to Thursday with the usual suspect, Weekly Initial Jobless Claims, which continue to hover near pre-recession levels.

On Friday, look for Productivity for the second quarter.
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. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based. 

When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse. 

To go one step further—a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. 

The volatility continued last week due to news here at home and the uncertainty in several regions overseas. Home loan rates remain attractive and I will continue to monitor them closely.

This column takes a look at current mortgage rates, market trends and indexes.  Jon Lamkin is Vice President of Mortgage Lending for Guaranteed Rate, 322 Route 46 W Suite 170 • Parsippany, NJ • 07054.  He may be reached at 973.939.8661  /  jon.lamkin@guaranteedrate.com  /  www.guaranteedrate.com/jonlamkin

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

TAP Into Another Town's News:

TAP Into Another Town's News:

Sign Up for E-News

Millburn/Short Hills

Senior Rabbi of B'nai Jeshurun of Short Hills Leads 50 Adults to Israel

SHORT HILLS, NJ - Congregation B’nai Jeshurun’s Senior Rabbi, Matthew D. Gewirtz, led a group of 50 adults to Israel in early November. In addition to touring, the trip included Adult B’nai Mitzvah services and discussions with local leaders on various aspects of life in Israel.

Rabbi Gewirtz began his tenure as the Senior Rabbi of Congregation B’nai Jeshurun in ...

The Stress Busting Science of Adult Coloring Comes to Millburn

December 4, 2016

MILLBURN, NJ - Everywhere you look, adult coloring books are packing the shelves rapidly replacing cartoon characters with intricate swirls waiting for the calm stroke of a well-sharpened colored pencil or crayon. The adult coloring craze already swept Europe and is taking hold across the US and has now come to Millburn. On the first Tuesday of every month, the Millburn Free Public Library holds ...

Thank You Millburn Veterans!

November 10, 2016

Dear TAPinto Millburn/Short Hills Editor,

The Millburn High School SAVe Warriors Club wants to thank each and every veteran who joined us on Tuesday, November 8, 2016 at Millburn High School for lunch. It was truly an honor to host you, shake your hands and express our gratitude for serving our great country.

We would also like to thank Dr. Burton, Dr. Miron, Mr. Friedrich and the wonderful ...

Upcoming Events

Carousel_image_c20d525a95812bff361b_56974e1f719431e1e0d8_1480817210980

Tue, December 6, 11:00 AM

Millburn Free Public Library, Millburn

MMAC Empower Hour

Education

Carousel_image_d2c3afdee6e099ddefed_90b8eff21dace49bc2f3_orig_photo210041_3003871

Wed, December 7, 9:30 AM

Summit

Oak Knoll Lower School Open House

Education

Carousel_image_977c392e578a109b4a0e_874d6b772bef82570faa_unknown-3

Wed, December 7, 12:00 PM

South Orange Performing Arts Center, South Orange

Nutcracker

Arts & Entertainment

Carousel_image_76ec465ec222ecbfcf67_5c885c67c073b22e3e93_orig_photo210041_3003871

Wed, December 7, 4:30 PM

Summit

Oak Knoll Upper School Tours

Education

Ed Foundation of Millburn-Short Hills Welcoming Author R.J. Palacio

December 5, 2016

THE EDUCATION FOUNDATION OF MILLBURN-SHORT HILLS PRESENTS EVENING OF WONDER

FEATURING R.J. PALACIO, RENOWNED AUTHOR OF WONDER 

LECTURE, Q & A, BOOK SIGNING FOR FAMILIES

The Education Foundation of Millburn-Short Hills is proud to present an educational and inspiring event with appeal for both children and adults. R.J. Palacio, the #1 NY Times best-selling author ...

Video: Point View's Petrides Indicates Volatile Variables Could Spoil Market's Momentum

Point View Wealth Management Managing Director and Portfolio Manager, John Petrides, live on CNBC from 30 Rock discussing potential near-term risks to the market:

video.cnbc.com

Point View Wealth Management, Inc. works with families in Summit and beyond, providing customized portfolio management services and comprehensive financial planning, to develop and ...

Masterwork Camerata to Perform at Community Congregational Church

The Masterwork Camerata is pleased to present Martin Sedek’s Gifts of the Season at Short Hills Community Congregational Church on Friday, December 9th at 8:00pm. Gifts of the Season acknowledges the joys of the season, regardless of race, creed, or specific holidays celebrated. It draws from the secular prose canon, representing the gifts of Love, Light, Gratitude, Peace, Hope, and ...

Millburn Resident Robbed Whilst Walking Dog; Thief Had a Handgun

November 29, 2016

On November 23, 2016 Millburn Police Officer O’Neill responded to Millburn/Blaine on a report of a robbery. The Millburn Ave resident reports walking his dog down Millburn Ave at approximately 9:20 pm when he was approached by 2 black males on foot. The resident describes the actors as approximately 18-20 years old, both 5’8”, wearing all black clothing and skull caps. One of ...

Millburn/Short Hills Chamber to Host Business Cocktail Networking Event in Downtown Millburn

MILLBURN, NJ – The Millburn/Short Hills Chamber of Commerce is the preeminent organization to advocate and promote business in Millburn Township. The Chamber organizes events throughout the year to bring together business people and organizations interested in making Millburn a vibrant community to live and work.

Led by Chamber president Rick Davis, a Millburn resident and CFO at St.

Beckerman’s Theory of Everything

Any armchair theoretical physicist knows that Stephen Hawking has pursued a lifelong quest to come up with a Theory of Everything. This all-encompassing theory would tie together general relativity (large scale and high mass galaxies, stars, etc), quantum theory (quantum mechanics, quarks, atoms, subatomic particles), and Newtonian physics (gravity on small bodies, gas laws, electromagnetism) to ...

https://www.tapinto.net/towns/livingston/columns/meadowbrook-camp-corner/articles/q-and-a-with-owners-of-meadowbrook-country-day-camp

Recently, the owners of Meadowbrook Country Day Camp, Dan Milman and George Stein, took part in a fun Question and Answer session. Below are the questions and their responses. To learn more about Milman, Stein and Meadowbrook, click here to read a recent article that ran on TApinto.net.

WHEN YOU HEAR THE WORD CAMP, WHAT VISUAL COMES TO MIND?

George: A six lb.