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You are here: Home / Uncategorized / Mortgage Rates Drop – Employment Numbers Stink

Mortgage Rates Drop – Employment Numbers Stink

June 3, 2016 by Ron Henderson

10 yr note 060316Interest rates dropped like a rock today. Right when the Federal Reserve was talking up a fed rate increase, the employment numbers came in way below the consensus. The 38,000 created jobs in May was forecast to be 162,000. More numbers to digest:

The Labor Department also reported Friday that the headline unemployment fell to 4.7 percent. That rate does not include those who did not actively look for employment during the month or the underemployed who were working part-time for economic reasons. A more encompassing rate that includes those groups held steady at 9.7 percent.

The drop in the unemployment rate was primarily due to a drop in the labor force participation rate, which fell to a 2016 low of 62.6 percent, a level near a four-decade low. The number of Americans not in the labor force surged to a record 94.7 million, an increase of 664,000.

The private sector added just 25,000 jobs. Previous months’ reports also saw sharp downward revisions, with March sliding from 208,000 to 186,000 and April going from 160,000 to 123,000.

Jobs were skewed toward part-time, which added 139,000 positions. Full-time lost 59,000 jobs.

As a direct side note, there was a big tech RECODE conference this week. A lot of the conference was based on Artificial Intelligence (AI) and robotics. More 20th century, and unskilled jobs will be lost in the near future. I’m not hearing anything from the political candidates about restructuring the secondary education system to meet 21th century requirements. The general population wants to hear simple answers to complex issues, and will vote off 10 second sound bites. Creative Destruction of jobs is not new. But technology is moving faster that any time in history. The government, education system, and general population are too slow at reacting to the changes. Government hiring, increasing labor costs, and playing with trade treaties are at best short term bandages. Personally, I see the big picture as pretty scary.

That said… life must go on… and on a lighter note, it’s a good time to refinance 🙂

If you are in the Los Angeles region, have any questions or real estate sales or financing needs, feel free in contacting:

Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc
Gov’t Affairs Chair – California Association of Mortgage Professionals
www.mres.com
ronh@mres.com

Real Estate market, Mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley

 

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Filed Under: Uncategorized Tagged With: economics, housing affordability, mortgage rates

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