Michael Scarimbolo- Branch Manager via Total Mortgage Services
Billionaire investor Warren Buffett today said he sees strength ahead for US economy and predicts US consumers will not see current mortgage rates “for years to come.”
Surprise Jobs Data:
Current mortgage rates today are reacting to a surprise surge in new job creation and a reduction in new claims for unemployment benefits. While the ADP Employment Change report, which was released at 8:30 AM ET, has not always been a true predictor of the Non-Farm Payrolls report (released tomorrow), the ADP report typically is less intensive in its movement either positive or negative. This suggests that the Non-Farm Payroll report tomorrow could show substantial job gains above the +157,000 the ADP report showed today. For mortgage consumers seeking a home loan for a purchase or refinance this suggests that current mortgage rates would be heading higher.
Job strength hurts mortgage rates:
Also released this morning was the weekly Jobless Claims report which indicated that 11,000 fewer Americans files for first time unemployment benefits this week than last. This was much greater than the expected 3,000 person drop from last week. If this is truly a new trend, it is great news for the US economy, but not great news for mortgage rates.
Retail sales show growth:
Retail sales also appear to be gaining strength according to reports today of June sales from major retail companies. The US economy is largely dependent on the consumer spending money for its strength and these reports are also supportive of our economy gaining strength.
Debt ceiling talks at White House:
As we inch closer to the August 2 deadline to extend the US debt ceiling, President Obama is hosting Congressional leaders for talks today at the White House. Reports suggest that the President is willing to increase spending cuts, including some changes to Social Security, while Republicans are willing to consider reforms to the tax code that would close loop-holes and raise revenue.
