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Rate Update

An unexpected drop in hiring put an end to the excitement that had been bubbling up on Wall Street over the past two weeks. The government reported that US employers created the fewest number of jobs in nine months. The 18,000 net jobs created in June were well below market expectations of a 105,000 increase. Private companies added jobs at the slowest pace in more than a year. As a result, the Unemployment Rate moved up slightly to 9.2%, its highest level this year. The U-6 Underemployment Rate, a much broader measure of weakness in the labor market, showed that 16.2% of Americans who want to work were either unemployed or unable to find full-time jobs. Billionaire investor Warren Buffett repeated the popular belief that the economic recovery hinges on housing and jobs, saying Friday the nation’s employment picture will improve significantly once residential housing construction rebounds. For a time, the housing industry was building about 2 million homes a year while roughly 1 million households were being formed, and the nation is still working off that excess created during the housing bubble. Buffett expects employment to fall to about 6% within a few years, and the 2.5 million jobs lost in the recession will be replaced.

Currently, the 30 Year Fixed is 4.250% (4.416% APR) and the 15 Year Fixed is 3.250% (3.560% APR). There is a lot of news this week that could affect interest rates. The monthly inflation reports, Producer Price Index and Consumer Price Index, come out later in the week, but inflation is not major concern at this time. We will also see data on Retail Sales, Jobless Claims, Industrial Production and Consumer Sentiment.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile