As I’ve said here on this blog many times – when the national economic outlook gets brighter – a bit of rain falls on the Florida mortgage market scene. This is what happened this morning.
Today’s jobs report is causing mortgage rates in Florida to rise, capping a week during which rates have already jumped 3/8 percent off all-time lows.
The government’s November Non-Farm Payrolls report helped support the idea that we have or will soon see the end to the recession.
The national unemployment rate dropped to 10.0 %, as just 11,000 jobs were lost last month — much fewer than analysts had expected.
Still, it does seem a bit strange to be throwing around the “economic recovery” speak - as many Americans are still losing jobs – 7.2 million since 2008 – remember that data always requires some context.
Job Numbers a Lagging Indicator for Wall Street Analysts
Though many are still without work here in the US, we’re able to signal economic recovery from a financial perspective because Wall Streeters see employment figures as a lagging economic indicator. This is because business owners tend to make hiring decisions based on how business has been – not on how it will be at some point in the future.
As such, the jobs report rarely reflects the “right now.” As an example, job loss peaked in January 2009 – 4 months after the height of the financial crisis. We saw the same pattern during the Recession of 2001.
According to government data, during the last recession, job loss peaked in October 2001 but the recession ended the very next month. It wasn’t until October 2002 that employment went net positive on a monthly basis.
So, you can see from these examples why investors are cheering November’s jobs report. Better-than-expected numbers and a falling Unemployment Rate signal to them that at least on the whole, the economy is getting brighter.
However, dark clouds begin to loom for rate shoppers as the economy gets healthier. I know it seems oxi-moronic (I know that’s not a word), but better-than-expected data always pushes Florida mortgage rates higher. Rates are expected to open 0.250% higher versus yesterday’s close.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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I think you are probably right that it may be a little to early to be using the economic recovery speak. To be honest, while there have been some increases, I think we still have a long way to go, as often the reported unemployment doesn’t really take into account how many people are actually unemployed.
However, with that said, it can be a dangerous game to try to find and wait for the bottom of the real estate market. I think it is important to put it in perspective and realize that mortgage rates are at an all time low though, so even if they were to drop a little bit after you get your mortgage, they are still lower than ever before…
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