LoanCentral's Real Estate Lending Blog

The November jobs report was released today and showed 120,000 new jobs were created. The private sector added 140,000 new jobs, offsetting the government losses, which was right on with expectations.

Unemployment took an unexpected loss from 9% to 8.6%, which has many analysts scratching their heads. One number within the jobs report that isn’t getting very much attention is the ‘Labor Force Participation Rate’. This is a ratio that includes people qualified for work, above the age of 16 and not in the military, against the total number of people living in the U.S. This measures the total number of people living in the United States and participating in the U.S. work force. The participation rate fell from 64.2 to 64.0, which currently represents a 30 year low.

What’s important about this number is that it needs to be above 66 or it will be difficult for our economy to grow fast enough to lower our budget deficit.

The bottom line is that the jobs report shows the labor market continues to improve at a gradual pace. It is important to note that while we don’t see mortgage rates moving much higher in the near term, we also have a difficult time seeing rates moving much lower. Inflation, while not yet a problem, is still elevated. It if continues to creep higher, this will limit any improvement home loan rates may see.

Interest rate thought for the day: it’s better to be locked and wish you were floating, than to befloating and wish you were locked!