169K, 2.872%


Numbers. Numbers. Numbers.

real estate marketsEveryday we get besieged by numbers and those of us that like to follow them enjoy the post-game analysis too.  We can then make the short and long term predictions on what these numbers mean and how we should align our businesses going forward.

Ok, I’ll tell now.  The 169,000 number is the non-farm payroll number for the month of August. What this number does not include are the people that have stopped looking for work.  They are known as the underemployed.

The Labor Department also plays around with full time versus part time workers along with seasonal employees.

What gauge it did give to me is that there was not a lot of hiring for the back-to-school crowd.  We have become a nation of internet shoppers, not J C Penny visitors.  Less gas is used/sold, more UPS/FedEx guys but the survival jobs for some, working as a counter person at Macy’s are becoming almost a thing of the past.

I’ve been noticing that large malls in South Jersey (Cherry Hill and Moorestown) are counting on new food establishments to lure customers in along with “experiences.”  Yes, there are jobs, but the hard work, low wage jobs that make people go home tired and unhappy after work.

The emotional toll it puts on people is sad but it’s the current environment.

The 2.872% is what the 10 year treasury bill went to as a yield this morning after it went as high as 3.00% yesterday.  This number closely reflects what the mortgage rates are.  If you locked in yesterday, ask for today’s price if you want to be upset.

I find it interesting though that the fed funds rate and the CD/savings rates the bank pay have NOT gone up yet banks are now demanding more for personal and commercial loans.  Why? Because they can.  The spreads that the banks make on these loans have increased by about 1/2 a percent.  Lucky them, bad for you.

Mortgage rates are basically set every day by what the mortgage agencies are willing to pay for a specific loan.  The bank, actually, is not the place that finally lends the  money but, in fact, it is just the temporary stop on the way to Fannie Mae.

If you use a mortgage broker, banker or bank, you’ll get the same Fannie, Freddie, FHA, VA loan.  There is virtually no difference.

Now, back to the number.  The 2.872% from this morning is better than 3, but the real thing is that the Fed has not raised rates.  The Fed still believes there is no need to slow down an economy by raising rates.

So, why did they go up?  Anticipation.  Anticipation of an economy that is going to rebound and get strong.

But not with 169k so-so jobs created.  Never gonna happen.

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