Mortgage Buddy Mid-Week Commentary
Interest rates may have ticked up a sliver today, but for the past 5 weeks the markets have been trending downward. We are coming off of the worst May in a couple of years but as I keep saying we have to find a positive with everything, and the positive here is that rates are at their lowest point this year. REFINANCE NOW IF YOU HAVEN'T ALREADY
For those who read my posts you know I'm a mortgage geek and a CNBC junkie. I'm constantly reading and listening to commentary from technical traders, hedge fund managers, and those who have made more money this year than I will in the next 5. There seems to be a general agreement that global growth has slowed dramatically. We have seen it very clearly this week with our manufacturing data and tomorrow we may see it with a tick up in the unemployment rate. The only way the rate comes down tomorrow is if we had a slew of people check out of the work force or give up on looking, because there isn't much hiring.
Is this the new normal?
The corporate earnings are great and the balance sheets are strong so what gives? In a word TECHNOLOGY. The recent crash forced companies to reign in spending and figure ways to make money without people power. Now you can say all you want about outsourcing jobs if you like, but technology is still cheaper than jobs in Puerto Rico. And for those who don't know that's where the jobs are going now. It used to be India. Companies have taught themselves how to make more money with less overhead. The economy is still in recovery so if their is any chance of a prolonged economic slow down there is no reason to risk profits by hiring and training new people. Technology has made less skilled people expendable.
What do you think the new normal unemployment rate will be?
My guess is 7%.
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