Wow, what a ride! Perhaps one of the most anticipated economic reports of the year came and went with a flurry. On Friday, December 6, the Unemployment Report and the Non-Farm Payroll counts were released and the dust still doesn’t appear to have settled. First, the Unemployment Rate for November dropped from the 7.3 percent October number to 7.0 percent and there were 203,000 new jobs created, much higher than the 180,000 anticipated. The unemployment rate is the lowest in five years.
When the numbers were first released, mortgage rates took a hit, falling by 12/32 at one point yet after a see saw battle in the morning, mortgage rates appear to not only be unscathed from the previous day but actually a bit better, finishing up at 15/32, nearly a full point swing in just a few hours.
On Thursday, Freddie Mac reported the nation’s average interest rates for 30 and 15 year mortgage loans. The 30 year came in at 4.46 percent with one-half point, higher than the previous week’s 4.29 percent and 4.22 percent the week before that. The 15 year rate also saw an increase from 3.30 to 3.47 percent.
The Fed keeps an eye on both the non-farm payroll number and the unemployment rate and previous
Fed announcements made it clear that once the unemployment rate hit 6.5 percent, the now famous QE3 program, the $85 billion per month version, would soon begin its end. Are we getting closer to that?
From an unemployment rate count, yes, it appears easing sooner rather than later is in fact in the cards. Yet other Fed chatter hinted that the rate would have to go down even more before the QE program should stop, even as low as 5.50 percent.
November’s numbers take into account the Thanksgiving holiday but did confirm the similar jump from October. There were many who thought perhaps the October payroll numbers were skewed a bit due to the partial government shutdown but with two months in a row with slightly better than expected numbers, the improvement in the job front can’t be denied.