Unemployment picture improves; mortgage rates up!
Posted February 3, 2012
The economy added 243,000 Non-Farm Payroll Jobs in January, helping to push the Unemployment Rate down to 8.3 percent. This number was much stronger than consensus estimate, and bond yields soared at moment of the announcement, with the yield on the 10 year jumping from 1.81 to 1.91 in a matter of two minutes first thing this morning. As of early afternoon, the 10 year yield had reached 1.95 pushing it to the highest level we’ve seen in quite a few trading days, and helping to put upward pressure on mortgage rates.
The jobless rate is now the lowest we’ve seen since January 2009, giving a renewed sense of confidence to the markets. But is it all hogwash really? Some economists estimate that the true unemployment rate in America is actually much closer to 16% when you consider all parties involved. This specific discussion will continue to be at the forefront this year due to the current political climate and the fact that it’s an election year.
The DJIA has embraced the jobs number as well, jumping 150 points by mid-day and allowing the markets to begin flirting with 13,000. The real question that I have out of this newest jobs data is will this be the beginning of a positive trend strong enough to derail the Fed’s Monetary Policy Forecast earlier than expected? We shall see my friends… Have a great weekend.