The Labor Dept. announced the monthly jobs report today with a big yawn from the investor community. They reported 173,000 jobs were created, but expectations had been that the number would be 218,000. Historically, this number gets revised, so the investor market did not react.

They say that unemployment went down from 5.3% to 5.1% despite the weak number. This is the lowest number since April 2008.  Both of these are numbers that could cause the Fed to have reason to raise the Fed Funds Rate.  Hourly earnings were up 0.3% and the average work week went from 34.5 hours to 34.6 hours. The Labor Dept. also revised the numbers from June and July which were undercounted by 44,000.

The response rate to their survey this month only had a 69.9% participation, so most likely these numbers will be revised up, maybe even more than expected.

The Labor Dept. also had in their numbers that 10.3% of workers are looking for work or better work (since so many workers are under-employed for their skill level) and the Labor participation rate 62.6% means there is still a lot to do to make the economy stronger. But this also means that once we have more people working, there will be inflationary pressure.

My expectation is that interest rates will remain flat or in a tight trading range until “the Fed” (FOMC) meets on September 17th and votes on whether to raise the Fed Funds Rate (the rate at which they borrow from each other), which would also raise the Prime Rate (the rate they give the public).

After all that, interest rates remain unchanged.

Remember good news in the economy is bad news if you are locking in a fixed rate mortgage.