Long-Term Rates Drop Due to Weak Employment Report
Mortgage News from Quicken Loans
This morning the U.S. Labor Department issued its monthly employment report that showed job growth in the month of July was lower than expected; non-farm payrolls increased by only 113,000, well below the anticipated 150,000 increase. The report sparked a rally on Wall Street, causing long-term interest rates to decline significantly and leading to speculation the Federal Reserve may pause in its short-term rate hike campaign when it meets Tuesday, Aug 8.
"This morning's weak employment report is sparking a market rally and long-term rates have already fallen significantly and may lead the Fed to pause future short-term rate hikes when they meet next week," said Bob Walters, chief economist at Quicken Loans. "The Employment Report underlines the overall health of the economy because two-thirds of all economic activity is consumer spending. The markets, Wall Street, the Fed - they all watch this figure very closely. This could be good news for those in the market to buy a home and homeowners seeking to refinancing their existing mortgages."
This article is reprinted by permission from Quicken Loans © 2006 Quicken Loans Inc. All rights reserved.
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