This week we got a little relief from the increasing rates of last week. We started the week with a scare, and then saw the balloon deflate.
Why? On Monday, we got the April Institute of Supply Management’s index number falling to 50.8% from 51.8%, a 1% drop, and getting closer to what we would consider an indication of a shrinking economy. This is slightly good news for rates bad news for people. On Wednesday the Q1 Productivity dropped 1% unit, labor costs went UP 4.1%, which is a lot and usually would push rates up because it is a possible hint at inflationary trends. Then the weekly jobless claims were up 17,000 to 274,000.
JOBS JOBS JOBS – the monthly jobs report came in up 160,000 and the jobless rate is at 5%. They also revised the payroll numbers for Feb and March lower. All these were slightly helpful to keep mortgage rates down. Not the big news that was expected so we are now on watch for May numbers. It should be noted that in the summer the economy does look better and tends to push rates up. So as I always say, don’t gamble – lock in your rate.