The labor market has certainly had its share of reasons to cheer and groan this year. September's Jobs Report was no exception.
There were 156,000 new jobs created in September, the U.S. Bureau of Labor Statistics reported, below the 176,000 expected. Gains occurred in professional and business services and in health care. July numbers were revised down while August was revised up, leaving job gains for those two months 7,000 less than previously reported. Job growth in 2016 has now averaged 178,000 per month, compared with an average of 229,000 per month in 2015 and 251,000 per month in 2014.
The unemployment rate ticked up to 5.0 percent from 4.9 percent, which is little changed since September 2015. And from September 2015 to September 2016, average hourly earnings rose 2.6 percent.
According to data analytics firm CoreLogic, August home prices, including distressed sales, rose 6.2 percent year-over-year with a 1.1 percent gain from July to August. CoreLogic's chief economist, Frank Nothaft, said, "Home prices are now just 6 percent below the nominal peak reached in April 2006. With prices forecasted to increase by 5 percent over the next year, prices will be back to their peak level in 2017."
As home prices continue to rise, home loan rates still remain in historically low territory, helping opportunities remain for those considering a home purchase or refinance.
Forecast for the Week
After a back-to-school shopping season that didn't make the grade in August, many hope Retail Sales rebounded in September. Markets will be closed on Monday for Columbus Day.
The minutes from September's Federal Open Market Committee meeting will be released Wednesday afternoon.
As usual, weekly Initial Jobless Claims will be reported on Thursday.
On Friday, Retail Sales, the Producer Price Index and the Consumer Sentiment Index will be released.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.
To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Mortgage Bonds declined in recent weeks. However, home loan rates continue to hover in historic territory.
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 07, 2016)
