A mixed bag of economic reports sent interest rates and the stock market higher early Friday. Stocks closed up 292 (good) and the 10 Year Treasury up about 10 basis points at 1.56% (bad for mortgage rates). Mortgage rates are staying in the 3.5% range but moving more to 3.625% than 3.375%
The Bureau of Labor Statistics employment numbers showed non-farm payrolls increasing 163,000 in July, well above the consensus of 100,000 and close to the consensus range high of 165,000. While this was a welcome improvement over last month’s numbers, the revision to last month’s 80,000 down to 64,000 tempered the elation. On the unemployment front, new claims for unemployment were only up 8000 from last week to 365,000, slightly below the consensus and right at the 4 week moving average. The disappointing part is that last week’s claims were revised up 4000 and the combination of the new jobs report and the unemployment numbers raised the nation’s unemployment numbers back up to 8.3%. We’ve now experienced 42 weeks of unemployment above 8%. On average, the economy has created 151,000 jobs per month during the first 7 months of the year but the nation’s economic growth slowed to 1.5% during the second quarter, down from 2% during the first quarter and 4.1% during the 4th quarter of 2011.
In a nutshell, we’re taking two steps forward and one back. Or at least I hope it's not one forward and two back.
Denver metro is in the top five cities with the lowest rental vacancies (2.4%) which is good for home prices. FHA and USDA loans are both going to be increasing the fees on October first. And we have a fantastic weekend of Olympics ahead. Have a great weekend.