IN THIS ISSUE
Last Week in Review: First quarter Gross Domestic Product tumbled, while home prices continue to rise across much of the country.
Forecast for the Week: The Jobs Report for April could be a market mover on Friday.
LAST WEEK IN REVIEW
"The only people who never tumble are those who never mount the high wire." Oprah Winfrey. After reaching higher levels at the end of 2014, Gross Domestic Product (GDP) tumbled in the first quarter of 2015.
The first reading for first quarter 2015 GDP fell to an anemic 0.2 percent, well below expectations and down from the 2.2 percent recorded in the fourth quarter of last year. All of the components within the report were weak, including consumer spending. The weak growth could be due in part to the West Coast port strike and the severe weather across much of the country earlier in the year.
GDP measures the value of the production of goods and services in the U.S. and is considered the largest measure of economic activity. This is an important report to look out for, as it is a key barometer of our economic growth and recovery. It could also be a key factor in the Fed's decision regarding when to raise the Fed Fuds Rate (the rate banks charge each other for lending money overnight)—which could have a big impact on the markets and home loan rates later this year.
In the housing sector, the February Case Shiller Home Price Index showed that home prices rose by 5.0 percent on an annual basis, up from the 4.5 percent annual increase recorded in January. This was the fastest rate of annual growth in six months. From January to February, prices rose 0.5 percent.
The bottom line is that home loan rates near historic lows, and now is the best time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. I can be reached at email@example.com.
FORECAST FOR THE WEEK
The labor sector will be front and center with Friday's Jobs Report for April.
- On Tuesday, look for the ISM Services Index, which is a national non-manufacturing index.
- Employment data kicks off on Wednesday with the ADP National Employment Report, the prelude to the government's Jobs Report. Also look for Productivity for the first quarter of 2015.
- On Thursday, Weekly Initial Jobless Claims will be released, as usual.
- Friday is the big day with the April Jobs Report, which includes Non-farm Payrolls, Hourly Earnings and the Unemployment Rate.
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.
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.
Economic Calendar for the Week of May 04 - May 08
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: Michael.Borodinsky@caliberhomeloans.com
Follow Michael on Twitter: @mikeborodinksy