Mortgage markets handled the issues caused by Hurricane Sandy without any major disruptions. Stronger than expected economic data also had little impact, and mortgage rates ended the week with little change.
Friday’s Employment report showed that the economy added roughly twice as many jobs as expected (including revisions). Against a consensus forecast of 125K, the economy added 171K jobs in October, and the data from prior months was revised higher by 84K. The Unemployment Rate increased to 7.9% from 7.8% last month, as expected, due to an increase in the size of the labor force (see below). Overall, this report was encouraging in most areas. Of note, the collection period for the October data ended before Hurricane Sandy hit, so next month’s report will reflect the storm’s impact.
The Unemployment Rate is determined in a separate survey and is based on two factors, the number of jobs and the number of people in the labor force. According to this survey, the economy added a whopping 410K jobs, and the labor force increased by an even larger 578K people. Clearly, strong growth in the number of jobs is great news for the economy. A growing labor force is also positive for the economy, and it reflects increased optimism about finding a job, but it leads to a higher percentage of people classified as unemployed.
The most significant economic data this week will be the ISM Services index on Monday, (today). The Trade Balance will come out on Thursday. Import Prices and Consumer Sentiment will be released on Friday. Tuesday’s election will dominate the news headlines this week. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.
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