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Job Growth Springs Back

05/11/2015

IN THIS ISSUE

Last Week in Review: Job growth rebounded in April, while home prices continue to rise. 

Forecast for the Week: Look for news on retail sales, consumer sentiment and wholesale inflation in the second half of the week. 

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LAST WEEK IN REVIEW

Put a spring in your step. Job growth bounced back in April, after the dismal numbers for March. How did Mortgage Bonds and home loan rates react? Read on below.

The April Jobs Report showed that 223,000 jobs were created, which was essentially in line with expectations. The Unemployment Rate fell to 5.4 percent, matching lows not seen since May 2008.

However, there were some downsides in the details. The Labor Force Participation Rate (LFPR) is at 62.8 percent, still near the lows seen in the late 1970s. 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.

Meanwhile, the number of jobs created in March was revised even lower, down to 85,000 from the 126,000 previously reported. The question now is whether March's reading was just an anomaly due to the harsh weather across the country, or signs of slowing job growth. Stay tuned, as future reports will be revealing.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose 5.9 percent from March 2014 to March 2015. This was the 37th straight month of consecutive annual gains in home prices nationally. CoreLogic noted that limited supply, buyer demand and low rates continue to put upward pressure on home prices in most markets.

Mortgage rates have moved higher in recent weeks, but were able to back off due to the mixed Jobs Report. Home loan rates remain near historic lows, and this season 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. I can be reached at michael.borodinsky@caliberhomeloans.com.

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FORECAST FOR THE WEEK

The second half of the week is busy, featuring several key reports.

  • Economic data begins on Wednesday with Retail Sales for April, which will gauge consumer spending.
  • Thursday brings the Producer Price Index, which measures inflation at the wholesale level.
  • Weekly Initial Jobless Claims will also be released on Thursday.
  • The week comes to an end with the Consumer Sentiment Index and Empire State Index on 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.

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 11 - May 15

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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

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