Key Details Lurking in May Job's Report

June 9, 2014 at 1:30 PM

"The spotlight's hitting something that's been known to change the weather." Elton John. The Jobs Report always has the power to change the "weather" for the markets and home loan rates. Read on to learn what May's report revealed. 


The Labor Department reported that 217,000 new jobs were created in May. This was in line with expectations, though a decrease from the 282,000 job creations that were reported in April. The Unemployment Rate remained steady at 6.3 percent, the lowest level since September 2008. 



However, digging further, it's important to note that many low paying jobs dominated the new hires in healthcare, bars and restaurants. In addition, the Labor Force Participation Rate (LFPR) was unchanged at 62.8 percent, matching a 35-year low. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery. All in all, the Jobs Report for May was a decent one, but nothing that will push the nation into full employment.

Sign Up for E-News



In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose by 10.5 percent from April 2013 to April 2014. April marks the twenty-sixth consecutive month of year-over-year home price gains. However, as CoreLogic noted, "The weakness in home sales that began a few months ago is clearly signaling a slowdown in price appreciation. The 10.5 percent increase in April, compared to a year earlier, was the slowest rate of appreciation in 14 months." 



What does this mean for home loan rates? Mortgage Bonds continue to remain at some of their best levels of the year, thanks to the weakened Euro, the Fed's Bond-buying program and the tepid economy. Since home loan rates are tied to Mortgage Bonds, as Bonds improve, rates improve. In recent weeks, home loan rates have hit their best levels this year! 



The takeaway is that now remains 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.

The second half of the week heats up with several key reports.

•                Economic data is on the light side this week and doesn't begin until Thursday's release of weekly Initial Jobless Claims.

•                Also on Thursday, Retail Sales for May will be released.

•                On Friday, the Producer Price Index for May will be closely watched after April's numbers revealed inflation pressures.

•                Preliminary Consumer Sentiment for June will also be reported Friday.

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.  Bonds rallied late in the week, helping home loan rates remain near historic best levels. I'll be watching closely to see if additional rallying continues.

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 History of the "Mill" in Millburn

December 9, 2016

MILLBURN, NJ - In 1793 Springfield Township was created, and within this new land grant, Millburn and its rich and diverse history began. A mainstay of that lineage comes from the mills erected along the banks of the Raw Way River, today's Rahway River, 

In 1756, Samuel Campbell set sail from Edinburgh, Scotland at the age of 21 with dreams of opening a bookstore in New York. Campbell ...

Upcoming Events

Carousel_image_c1ffc1927dc55e6688f0_57ca57b0f5d9e483b898_carousel_image_15e606681d1f7d94b215_santa2

Sat, December 10, 10:00 AM

Reeves-Reed Arboretum, Summit

Cookies & Cocoa with Santa at Reeves-Reed ...

Arts & Entertainment Home & Garden

Carousel_image_1c53345ad8a71f3f8adc_95070b5be2ac01bee1af_20598139d27926cff56b_ab9ae7960f2454054a7f_small_cyrille-aimee-holiday

Sat, December 10, 7:00 PM

Reeves-Reed Arboretum, Summit

Holiday Concert at Reeves-Reed Arboretum

Arts & Entertainment

Carousel_image_d4b0932ba3f24a0bdc9c_7a84eeb52e7d2769296d_unknown-2

Mon, December 12, 1:00 PM

Millburn Free Public Library, Millburn

Holiday Cookie Swap at the Millburn Library

Food & Drink

Video: Point View's Dietze Says Market 'Has Gotten Ahead of Itself'

December 9, 2016

Point View Wealth Management Founder, President, and Chief Investment Strategist, David Dietze, spoke live on BNN on investment strategies following recent record highs in the stock market:

bnn.ca

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

Millburn Township Notice of Pending Bond Ordinance and Summary

MILLBURN TOWNSHIP NOTICE NOTICE OF PENDING BOND ORDINANCE AND SUMMARY

Ordinance #2472-16

The bond ordinance, the summary terms of which are included herein, was introduced and passed upon first reading at a meeting of the Township Committee of the Township of Millburn, in the County of Essex, State of New Jersey, on December 6, 2016.  It will be further considered for final ...

Mid-Winter Camp is Back at the Cora Hartshorn Arboretum and Bird Sanctuary in Short Hills

Mid-Winter Camp: February 20th - 24th, 2017. 

Turtle Tots Mid-Winter Camp: (3 - 5 year olds):  9;00 am - 12 noon

Explorers Mid-Winter Camp (1st - 3rd Graders)

Stay warm during Winter Break as we explore the Arboretum with our snow boots and gloves on!  Children will enjoy some fun in the winter weather while learning about some of the curiosities of the winter season.

Vehicle Vandalized in Short Hills Apartment Complex

December 6, 2016

On November 29, 2016 Millburn Police Officer Royce stopped a 2010 Toyota on Glen/Marion for an inoperable headlight. The investigation led to the arrest of the 55 year old driver Laquentin Walker out of Teaneck on an outstanding traffic warrant out of Deptford. Mr. Walker was released with a new court date.

On November 30, 2016 Millburn Police Officer Royce stopped a 2012 Dodge Charger on Rt ...

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.

To Be a Better Investor, Be More Rational!

Many posit the theory of rational man, who coolly and carefully calculates his self-interest in a logical manner. We all fall somewhat short of that ideal.  In the financial markets, irrationality can be costly. What are some of the common foibles, and what can we do to minimize their damage to our portfolios?

Don’t Make Decisions Based on What You Paid For an Investment

How ...

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 ...

Q/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.