Three Economic reports released today: Jobless Claims, Leading Indicator, and Philadelphia Fed Index. Colorado Home Mortgage Loan rates expected to recover next week
We had three economic reports come out today all of which appears to be good news for Mortgage Backed Securities. The main thing to monitor will be volume. If Volume is low then Colorado Home Mortgage Loan rates will increase until something stimulated activity in the market. So far today that has been the case and Colorado Home Mortgage Loan rates are beginning to increase slightly. This can also be a direct reflection on the volume created in the stock market over the last couple of days. This trend will likely stop and Colorado Home Mortgage Loan rates are expected to recover next week. Each of the reports today indicated that we are still in a bit of a mess as it relates to our economy. Each report reminded us that we are not out of the woods and we still have work to do before recovery is recognized. Jobless Claims came in as expected and showed that we are still extremely high. Colorado Home Mortgage Loan rates should have responded well to the news and rates should come down a bit. The four-week moving average and continuing claims are watched more closely for changes. The labor market is considered to be improving when the four-week moving average goes below 400,000. If unemployment goes low enough it can put wage pressure on the economy and can cause increases in interest rates.
Leading indicator report came out as expected today. The Leading Indicators report is composed of ten indicators designed to forecast the strength of the economy six to nine months into the future. The ten indicators are picked from different parts of the economy and are chosen because of their relevancy and accuracy. They are each given equal weight when applied to the composite index. This report basically give you the state of the economy and can show whether we are moving forward as a whole. Colorado Home Mortgage Loan rates don’t typically move with this indicator, but it does give us some idea whether we are in a recovery state or not.
Finally the Philadelphia Fed Index is used to get a sense of the Manufacturing component which accounts for about 20% of our market. The Philadelphia Fed Index is considered to be a good indicator of changes in everything from employment, general prices, and conditions within the manufacturing industry. Manufacturing is considered to be a precursor to future economic conditions and it lays the groundwork toward economic recovery. For example, in a poor economy if manufacturing starts to pick up there is an expectation that the economy will soon follow behind. In short the reports don’t lie the economy still needs help in a bad way, and normally when the economy suffers Colorado Home Mortgage Loan rates show improvements.
