Economic Update: Good News!

Economic Update: Good News!

This week was filled with good economic news. Rates should have jumped up, but they didn’t. When I see this, I know that a jump is right around the corner. Luckily it hasn’t happened yet. (Hint, hint…time to lock in your rate.)

Since November rates have come down, we hope that they stay down, however cyclically, rates tend to go up right after-tax season in April.

Tuesday: the ISM (institute of Supply Management) put out their February Service Sector Index, and it climbed to 59.7%.

On the same day we got the December New Home Sales, which were up 26% from a November number that had been revised down. Put those two huge numbers together, and this was not good for bonds (which means bad news for rates). However, that day the bond market pricing remained unchanged for most of the day.

Thursday: the Q3 productivity first guess number was up 1.9%, and unit labor costs were up 3.6% – those two numbers together were good news, and mildly bad news for rates. However, rates stayed the same (in fact the bond market had a slightly good day).

Friday: the JOBS number came out for February. Despite the really bad weather, non-farm payrolls were up 20,000, and the jobless rate dropped to 3.8% with the average hourly earnings up 0.4% – all TERRIFIC NEWS for the economy and workers, but not good for rates. The bond pricing remained unchanged.

This collective news this week was the best in a long time. I’m happy the government has finally got people to work, and wages are up. But normally that means higher interest rates because the more people make, the more they have to spend, the more producers of goods can charge, and the people will pay because they are making more money… and on and on we go.

Close Menu



Don't know where to start? Learn the basics with the
My Cash Flow Academy Training Manual
Dive into 11 modules, providing you knowledge on: