Market News

Unemployment Rate Jumps
Mortgage rates improved again this week as expectations for future economic growth declined. An economic slowdown typically eases inflationary pressures, which is favorable for mortgage rates. The economy had been showing signs of strength recently mainly due to a surge in exports. Since the dollar has risen against other currencies and many foreign economies are slowing, though, this pocket of economic strength is expected to decline. Investors also reacted to the slowing economic growth by selling stocks, and they moved some of the funds to mortgage securities, which added to the decline in rates.
Even with the recent strength in exports, the labor market has been weak for most of the year, and this week's economic data continued the trend. The August Employment report showed that the economy lost -84K jobs, close to the consensus forecast, and the figures for June and July were revised a little lower. The big surprise came in the Unemployment Rate, which shot up to 6.1%, the highest level since September 2003.


Also Notable:
In August, Average Hourly Earnings, an indicator of wage growth, increased at a 3.6% annual rate
The Fed's Rosengren explained that the easing in rates helped offset tighter credit conditions
The European Central Bank (ECB) made no change in rates
Oil prices fell to $106 per barrel, the lowest level in five months