Mortgage Rate Update September 1, 2011

Mortgage rates are mostly unchanged this morning.

The markets are digesting a long list of economic data this morning as investors position their portfolios heading into tomorrow’s all-important jobs report.

Reports out of Asia and Europe showed that manufacturing activity slowed by more than expected last month.  However, economic data here in the US showed better than expected activity.

This morning’s read on weekly jobless claims showed that the number of Americans filing for initial unemployment benefits fell by 12,000 from the week before.  In a separate report  the Institute for Supply Management showed that business activity came in slightly higher than expected last month which is an encouraging sign.

There are two major events on the horizon that could cause a shift in rates..  Tomorrow, the Bureau of Labor Statistics will release its monthly jobs report.  The markets are expecting 100,000-110,000 new jobs to have been created in the private sector last month.  A figure below this would likely cause rates to improve and vice versa.  Second, President Obama has announced that he will make a speech to a joint session of Congress on September 8th in which he will announce a job-creation & deficit-reduction plan (theoretically the two objectives oppose each other so this should be interesting).

Current Outlook:  neutral heading into jobs report