Last week there wasBIG news on the job news! It appears that labor market is improving at a gradual pace – the headline number for job creations in November came in at 120,000, with 140,000 private jobs offsetting government losses…plus, some upward revisions to the two previous readings added 72,000 more jobs than had been reported.
There is even more good news…Hourly Earnings grew by 0.1% – a number that suggests no threat of wage-based inflation. Remember, inflation is the nemesis of Bonds and Raleigh Home Loan Rates because when inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment & Raleigh Home Loan Ratesare tied to Mortgage Bonds, this would mean Raleigh Mortgage Rates move higher. So the Hourly Earnings number was good news for Bonds andRaleigh Home Loan Rates.
The big Kevin Martini surprise was a rather sharp decline in the unemployment rate to 8.6%, the lowest unemployment rate we’ve since March of 2009.
It is good news that we’re seeing some slow & steady improvement in the labor market…and then pepper in other recent positive economic signals, means we are not near a recession at the moment. But our economic health remains fragile, and any external shock from Europe could easily disrupt the economic improvement we are seeing.
The bottom line is that the uncertainty out of Europe – and the prospect of additional Mortgage Bond buying (QE3) from the Fed – should continue to support Bonds and Raleigh Home Loan Rates as they will benefit from investors looking for a safe haven for their money. However, it is also unlikely that Bonds and Raleigh Mortgage Rates. Inflation, while not yet a problem, is still elevated…and if it continues to creep higher, this will limit any improvement Raleigh Home Loan Rates may see. With Raleigh Mortgage Rates still near historic lows, now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you.
Not a ton of news this week since earnings season is over, Stocks and Bonds will battle over investing dollars and trade off the geo-political headlines out of Europe.
• The ISM Services Index will be reported on Monday. This report gives investors a gauge as to how the service sector is holding up in this economy. Individuals employed in this sector produce services rather than products. Service sector jobs provide a significant number of jobs in the US – including housekeeping, messenger services, tax preparation, nursing and teaching.
• Weekly Initial Jobless Claims will be delivered on Thursday. This week’s report comes after last week’s report showed that claims rose above the 400,000 level for the first time in four weeks.
• Consumer Sentiment will be delivered on Friday to cap off the week.
In addition to that news, here’s something to keep an eye on in the weeks ahead. Stocks may be set for another jump. That’s because of something that’s become known as the “Santa Claus Rally.” The Santa Claus Rally is usually a surge in Stocks in the week between Christmas & New Years.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and Raleigh Home Loan Rates improve, while strong economic news normally has the opposite result.
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