Here’s what December’s Jobs Report showed...
and what it means for home loan rates.
The Labor Department reported that 103,000 jobs were created in December, and private job growth was 113,000. While these numbers were below the recently ramped up expectations, they do show that the trend in the labor market is improving. Also noteworthy are the upward revisions to the prior two months readings, showing 70,000 more jobs created than had been previously reported.
And yet, the real shocker in the report was a significant decline in the unemployment rate to 9.4%, which is the lowest unemployment rate since May of 2009.
So what did we learn from this Jobs Report?
1. While positive news, this Jobs number was still soft enough to support the Fed continuing on their plans for a full dosage of QE2 for the economy... and this won’t be good for Bonds and home loan rates, as it carries along some real inflation threat down the road.
2. The recent tax package and lower tax rate extensions have not yet had enough time to be seen or felt in the economy, so those factors should help provide further improvement in the labor market in future months... but also will create inflation - bad news for Bonds and home loan rates.
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