Commentary: A stronger-than-expected surge in the number of new jobs created in June sent mortgage investors scrambling to mark-down prices and mark-up rates earlier this morning.
According to data compiled by private payroll processing firm ADP -- the private sector added 157,000 workers last month - more than double the consensus estimate from economists calling for a gain of 70,000.
The Labor Department chimed in with some better than projected news of their own. According to government figures the number of Americans filing first-time claims for unemployment benefits dropped by 14,000 during the week ended July 2nd. Most observers were expecting initial claims to have declined by 8,000 or so.
Mortgage investors were already more skittish than normal as the clock ticks down on the Congressional efforts to raise the debt ceiling by August 2nd or face the real possibility Uncle Sam might loose his enviable AAA sovereign debt rating. A failure to make meaningful progress on this issue by the end of the month has the potential to not only trigger a notable spike in interest rates - but it will very likely push the economy back into a recessionary spiral and send global financial markets into a panicked selling stampede. I am not saying such dire consequences will occur - I'm just outlining the risks associated if Congress fails to "get their collective act together." Against such a backdrop it doesn't take much of an imagination to see why mortgage investors may refrain from pushing mortgage interest rates notably lower until the current game of political brinkmanship has run its course.
Be patient - be disciplined - and play it by the numbers.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
