Okay, it’s hard to believe but tomorrow morning is the first Friday of the month again. Where has the year gone? In some ways it has flown by and in other ways it seems like it’s been about two or three years. Know what I mean?
Any way, tomorrow morning is the jobs report that shows the statistics for the month of September. I’ve had a lot of people asking me what I think it’s going to show and what I think it’s going to do to mortgage rates. I’m going to lay out what I think are the four most likely outcomes and their potential impact on mortgage rates. At the end of the piece, I’ll put my “projections” on which one is most likely to occur.
The Jobs Report Comes In Better Than Expected – Remember, it’s not so much the actual number as it is the difference between market expectations and the actual numbers. But, if the jobs report comes in better than expected, here’s what I expect will happen:
- People will feel better than they did about the prospects for a recovery in the economy.
- People and institutional investors will move money (lots of it – how much depends on how much better) from the bond market and cash and put it into the stock market.
- The stock market will have a very nice upward swing.
- The bond market and mortgage backed securities will suffer from the movement of money.
- Mortgage Rates will go up.
The Jobs Report Comes in about as expected – status quo, mediocre, we just sort of limp along. If that’s the case, I expect we’d see a “non-reaction” in the markets.
The Jobs Report Comes in Worse Than Expected – a little bit worse, but not a huge amount worse. If that’s what happens, here’s what I expect:
- People will feel worse about the prospects for recovery in the economy and we’re Read more