How Today’s Jobs Report Impacts Mortgage Rates
This morning, the government reported that the U.S. economy lost 4,000 jobs in August. Led by losses in manufacturing and in construction, this is the first time since 2003 that the economy has failed to add jobs in any given month.
Markets had been expecting a job gain of roughly 110,000, but many players on Wall Street had been placing their bets to the weak side of that figure.
Very few (if any) expected a number this weak, however.
The implication of a weak jobs report is that many now believe that the Fed has an economic reason to lower the Fed Funds Rate at its next meeting. This is different from a “bail out”-type reduction that economists and market participants have debated ad nauseam in the press.
Remember, a lower Fed Funds Rate doesn’t directly correlate to lower mortgage rates. However, if the Fed acknowledges that the economy is slowing, that should help keep mortgage rates low.
Related posts:
- How The ADP Jobs Report Impacts Mortgage Rates
- The Bad Jobs Report Wasn’t All Bad — Mortgage Rates Fell
- Today’s Jobs Report Will Keep Mortgage Rates Highly Volatile
