The U.S. Job market is deteriorating at a quick pace losing 240,000 jobs in October. And if that wasn't enough bad news... September and August were revised sharply downward by 179,000 jobs each month. The losses were deep and across all industries with the services industry being the hardest hit. This is the 9th month of declines.
Our unemployment rate hit a 14 year high of 6.5%, jumping from a reading of 6.1% last month. So far in 2008, 1.18 million jobs have been lost.
The Dow has been all over the place already this morning. Down over 440, up 78. Stocks continue a rough ride after their worst two back to back days since 1987.
With this terrible Jobs Report, typically the Fed would step in with a rate cut to stimulate the economy. However, the Fed really has no room to cut with the Fed Funds Rate already at a low 1%. This could add to the pressure on stocks and boost bonds.
The Bond market is trading in a tight range between support and resistance. Unless we break outside this range, don't look for much change in home loan rates. Interesting to note is the current price of the 10 year Treasury note, which is down on the day by 78 basis points...while MBS is down 22 on the day, but flat since 10 a.m. ET. This highlights why it is so important to be watching the correct instrument.
What does all this mean if you are shopping for a home and a mortgage? There are a lot of great deals out there and with rates remaining low and attractive this could be a perfect time to buy. If you are waiting for the bottom, keep in mind that we don't see the bottom until it is behind us.
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