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 ...

Millburn-Short Hills Chamber of Commerce Hosting 'A Taste of Millburn' Soiree

January 18, 2017

MILLBURN, NJ - The Millburn-Short Hills Chamber of Commerce is hosting 'A Taste of Millburn' Soiree on January 30 at the Short Hills Hilton. Many business owners, elected officials, and residents are expected to come out and enjoy the festivities. 

Area restaurants will serve up tasting size dishes to sample while attendees sip the signature Cranberry Frost Martini created just ...

Theft at Louis Vuitton; Fraud and Forgery Strike Nordstrom at Short Hills Mall

January 14, 2017

On January 5, 2017 Millburn Police Officer Zonn responded to the Louis Vuitton store at The Mall at Short Hills on a theft report. Louis Vuitton personnel report a Hispanic male wearing an olive colored jacket and jeans concealed a pair of sunglasses valued at $760.00 and left the store without making payment. The incident is under investigation by the Millburn Police Detective Bureau.

On ...

Upcoming Events

Carousel_image_2c171107b5c8914328b0_e57741ca19a9114d6bc1_unnamed__18_

Fri, January 20, 12:00 PM

Oasis Building (behind University Middle School), Irvington

Community Church Oasis Volunteer Opportunity

Religions And Spirituality

Carousel_image_f422456eb0f1fa40d8a2_b73eab72872ab03aae78_veteran-hd-wallpapers-hd-wallpapers-8vznfz-clipart

Sat, January 21, 10:00 AM

Millburn High School, Millburn

Millburn High School Military Appreciation Day ...

Carousel_image_6da8ddb5c1222ab92074_unknown_copy

Sun, January 22, 12:00 PM

Cora Hartshorn Arboretum and Bird Sanctuary, Short Hills

Second Annual Lunar New Year and Welcome Spring ...

Education Green

Carousel_image_598e4bee3f95caa87a95_3a428b670b9e744650bb_unnamed__8_

Mon, January 23, 7:45 PM

Education Center, Millburn

Millburn Board of Education Meeting

Audio: Point View's Petrides Tells Bloomberg Says Content Move Makes Sense for Apple

January 19, 2017

Point View's Managing Director and Portfolio Manager, John Petrides, live on Bloomberg Radio (Interview starts at 1:35) discussing Apple's potential move into making original video content:

assets.bwbx.io

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

Video: Dietze Tabs Pharma, Energy, and Consumer Product Stocks Among Top Picks

Point View Wealth Management's Founder, President and Chief Investment Strategist, David Dietze, discusses his top picks in the wake of the Trump election:

bnn.ca

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

Proposed Bill Will Keep ‘Blue Lines’ in Towns

NEW JERSEY --- U.S. Reps. Leonard Lance (NJ-07) and Bill Pascrell (NJ-09) today took up the cause of many New Jersey municipalities and law enforcement groups by proposing the Blue Line Use Exception (BLUE) Act (H.R. 566).  Legislation that will permit ‘blue lines’ to be displayed on roadways. 

“One hundred thirty five police officers died in the line of duty in ...

Pure Barre Short Hills Announces 2017 Fitness Challenge

SHORT HILLS, NJ – Pure Barre, the largest and most established barre concept in North America, is pleased to announce the Set The Barre challenge, to help new and existing clients reach their 2017 health and fitness goals.

Whether you’re looking to switch up your fitness routine or start working out, Pure Barre can work with you to accomplish your new years resolutions. Designed to ...

Closed Fund Open Mind

Closed-end funds (CEFs) can play an important role in a diversified investment portfolio. They offer benefits similar to those of an open-end mutual fund, but also sport unique advantages.  

Unlike a traditional open-end mutual fund, CEFs have a fixed number of shares available to trade. Their price is not tied to the value of the underlying portfolio. The only way the number of shares ...