Economic Roundup: Week of November 5, 2012

 

Mortgage-backed securities trading handled the issues caused by Hurricane Sandy without any major disruptions. Stronger than expected economic data also had little impact, and mortgage rates ended the week with little change.

Friday’s Employment report showed that the economy added roughly twice as many jobs as expected (including revisions). Against a consensus forecast of 125K, the economy added 171K jobs in October, and the data from prior months was revised higher by 84K. The Unemployment Rate, however, increased from 7.8% to 7.9%mostly due to an increase in the size of the labor force. Overall, the report was encouraging in most areas. Of note, the collection period for the October data ended before Hurricane Sandy hit, so next month’s report will reflect the storm’s impact.

The Unemployment Rate is determined in a separate survey and is based on two factors, the number of jobs and the number of people in the labor force. According to this survey, the economy added a whopping 410K jobs, and the labor force increased by an even larger 578K people. Clearly, strong growth in the number of jobs is great news for the economy. A growing labor force is also positive as it reflects increased optimism about finding a job, but it leads to a higher percentage of people classified as unemployed.

The most significant economic data this week will be today’s ISM Services index. The Trade Balance will also come out on Thursday and Import Prices and Consumer Sentiment on Friday. Of course,Tuesday’s election will dominate the news headlines this week. There will be Treasury auctions on Tuesday, Wednesday, and Thursday as well.

November 5, 2012 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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