It’s amazing how so much can be made of the coming news, leading up to it. After much discussion and debate this week, we find that the monthly employment numbers are to a large degree a big non event. In fact at the time of this writing, the stock market is up a little and bonds are down a little. What’s not surprising is that the market was impacted at all.
Over the last several days, many market watchers were concerned that there would be significant job loss due to the weather all over the country in February. The fact is though, that we don’t appear to be impacted much by the weather at all. The good news, for now appears to be that any business lost during the month was recovered. This will keep the consumer/employee afloat. The unemployment rate is unchanged and after the new of the last year, that’s pretty good news.
Now the question is, where does the credit go? Within an hour of the release of the numbers, the Labor Secretary was showing charts on CNBC that showed both the shrinking job losses over the last year and the growth in GDP. The facts in those charts are true. The question for us to get an answer to is the following. Is it the government stimulus plan that is helping get this done or is it a natural occurrence of the business cycle? Interesting to be sure and there are strong arguments on both sides.
For now, it looks like the trend for flat interest rates will continue. However, it’s now March and the Federal Reserve has signaled that they will be out of the mortgage backed securities market by the end of the month. This likely means rates rise at that point. So for now, lock those rates in and get to the table. They are not likely to fall anytime soon.
