AgentIndustry News

Dismal labor report pulls down interest rates

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Friday morning's news of zero job growth in February, net of prior-month revisions, has taken low-fee mortgage rates slightly below 5.5 percent for the first time since last June, and that was the last time since 1950-something. Flat employment in a single month is not a red-hot news item. However, the cumulative failure of payrolls to grow during a year of strong-on-the-surface GDP and profit growth has at last broken through the optimistic, rates-will-rise-any-minute consensus. Be careful, here: we have cumulative employment failure, but we do not have any sign of a deceleration in the economy. February reports from the purchasing managers' association were slightly softer than January, but not trend-changers. The Fed's monthly "beige book" is a highly subjective collection of bedtime stories by and for central bankers, but February's showed no new weakness. Mortgage rates could fall farther in another bout of tail-chasing by portfolio and pipeline hedgers, but those moments in t...