Rate Update November 7, 2008
Mortgage rates are unchanged this morning.
As we discussed in yesterday’s rate update the big focus for the financial markets this morning is the monthly jobs report.
The Labor Department’s monthly report was released earlier and it was ugly. Analysts were expecting job losses of 200,000 for the month of October but in fact the economy lost 240,000 jobs. To rub salt in the economy’s wound the Labor department also revised higher the jobs losses previously reported for August and September.
Unfortunately the conditions in the labor market are not good. So far this year the US economy has erased 1.2 million jobs. The unemployment rate now stands at 6.5% which is the highest level since 1994.
Despite the weak data stocks are trading higher and mortgage-backed bonds are trading lower which is the opposite reaction we expected. The reason? Likely because investors had expected results to be worse than most economists had thought.
From a technical standpoint we remain cautious.
Oh, and in case you didn’t catch it last night, Brandon Roy is a God!
Current outlook: neutral