Daily Commentary by Larry Baer: Initial weekly jobless claims held their ground in the latest week, counter to consensus expectations for a mild increase. New first-time claims for government unemployment benefits were unchanged last week, holding at the lowest level since the early days of the 2007 - 2009 recession. The last two weekly readings have been the lowest since March 2008. The four-week moving average for new claims, a measure of labor market trends, fell 7,000 to 359,000 - also the lowest since March 2008.
Businesses are showing greater resiliency than expected and currently appear willing to hold on to more workers following the traditional holiday spike. While labor conditions are far from healthy, they are moving in the right direction across the board. Employers are not swiftly cutting positions as during the height of the recession, but none appear to be switching gears to consistently add headcount to their ranks. Considerable slack remains in the job market, with 23.8 million Americans either out of work of underemployed. At this juncture, there are no job openings for nearly three out of every four unemployed.
The good news is there was nothing in this morning's weekly initial jobless claims report to induce mortgage investors to nudge rates higher. The bad news is while labor market conditions have improved - economic growth and the attendant improvement in job creation is still well below levels where a marked acceleration in residential sales is expected any time soon.
Uncle Sam will wrap up a three-part auction schedule today with the sale of $29 billion worth of 7-year notes. Demand for this offering will likely be mediocre - but sufficient enough to avoid creating a noticeable impact on the current trend trajectory of mortgage interest rates.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
