Perfect time to lock in a rate

Even in light of a weaker than anticipated Bureau of Labor Statistics (BLS) job report, mortgage bonds are falling so far this morning.  According to the BLS, there were 160,000 new jobs created in the month of April.  This is lower than the 200,000 figure that economists expected, and shows an overall weakening of the job market.  With many states recently increasing their minimum wage, this can somewhat be expected.  If addition, there were also downward revisions of a combined 19,000 to the prior two months’ reports.  As for the Unemployment Rate, it remained steady at 5.0%.  Since the market was anticipating a reduction down to 4.9%, this was a miss as well. 


There are actually two reports that contribute to the BLS figures – the Business Survey, where we get the Headline number from, and the Household Survey, where the Unemployment Rate is derived from.  The Household Survey showed that job growth was actually negative, at (316,000).  However, they estimate that 362,000 people actually left the workforce.  The overall loss in the job market wasn’t enough to cause a move higher in the unemployment rate.  However, it did push the Labor Force Participation Rate lower, from 63% down to only 62.8%.  With the labor force near multi-decade low levels, this is part of the reason our economic growth has been at unacceptably low levels.  There are too few people paying into the system and too many people drawing against the system. 


With bonds near multi-year highs, mortgage interest rates are near the best we have seen in over two years.  This makes now a perfect opportunity to lock in while rates are low. 


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