June’s Jobs Report Wasn’t As Bad As The Headlines (And How You Can Take Advantage)
In June, for the first time since December 2009, the U.S. workforce shrank.
According to the Bureau of Labor Statistics, the economy shed 125,000 jobs last month even as the Unemployment Rate dropped to 9.5 percent. The drop in the Unemployment Rate is being attributed to fewer Americans looking for work.
At first glance, the jobs report looks weak but a deeper look shows something different.
Excluding the 225,000 government Census workers that recently left the workforce, the total number of employed persons actually grew by 83,000 in June. That’s 50,000 more working Americans as compared to May.
And, since the start of the year, the U.S. workforce has grown by 857,000.
Jobs growth is closely tied to economic growth because more working Americans means more disposable income which, in turn, stokes consumer spending. Job growth is better than job loss.
Consumer spending makes up the majority of the U.S. economy so as consumer spending grows, investor mentality tends to shifts toward “return on principal” (i.e. stock markets) from “safety of principal” (i.e. bond markets).
A move like this is often bad for home affordability because falling demand for bonds is tied to higher mortgage rates. In addition, with the growing number of Americans earning a paycheck, demand for homes is likely to increase, thereby helping to push home prices higher.
Overall, therefore, the jobs report should be bad for rate shoppers and home buyers in. Except, the markets aren’t reacting that way. For now, mortgage rates are slightly improved since the jobs report’s release.
Perhaps Wall Street is watching the wrong figures, but don’t let that be your loss. If you’re shopping for a mortgage, a home, or both, now may be your best time to make a move; while rates are still low; with home prices down; before traders change their tune.
Because when markets change, it’ll likely happen fast.
Related posts:
- The Bad Jobs Report Wasn’t All Bad — Mortgage Rates Fell
- May 2010 Jobs Report Gives A Temporary Boost To Home Affordability
- Make A Mortgage Rate Plan BEFORE Friday’s Jobs Report
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
