Daily Commentary by Larry Baer: The November nonfarm payroll report was not
nearly as strong as it initially appeared on its face.
Labor Department
figures show nonfarm employment increased by 146,000 jobs last month, defying
economists' expectations of a sharp pullback related to Hurricane Sandy.
Even so, employment gains for September and October were revised down by a
total of 49,000.
The national jobless
rate dropped 0.2% to 7.7% -- an almost four-year low. The sharp decline
in the jobless rate was almost entirely due to a large number of Americans
giving up the hunt for work.
The government's
statisticians said super-storm Sandy
(which slammed the densely populated East Coast during late October) had no
substantive impact on last month's employment and jobless rate results.
Boiling all this
statistical mumbo-jumbo down to its bare essence the "take away" is
that while labor market conditions are not getting progressively worse -- the
employment story is not getting much better. Mortgage investors had
largely already priced this perspective into their rate sheets - rendering
today's much anticipated November nonfarm payroll essentially
"toothless" in terms of its impact on the current trend trajectory of
mortgage interest rates.
Looking ahead to the
coming week -- news headlines related to Congressional efforts to find a way
down from the edge of the "fiscal cliff" will easily trump the
smattering of scheduled economic reports as well as the Treasury Department's
three-part auction featuring 3- and 10-year notes and a round of 30-year bonds.
The week's wildcard designation goes to Fed Chairman Bernanke and his fellow
central bankers as they conduct two-days of Federal Open Market Committee
policy discussions on Tuesday and Wednesday.
A resolution of the
"fiscal cliff" issue by Christmas, a week before the deadline,
remains uncertain but not out of the question. If/when a political
compromise is reached to avoid the "fiscal cliff" -- stocks will
likely rally at the expense of rising mortgage interest rates (as long as the
deal is something more than a simple extension of the current deadline).
Until/unless a fiscal agreement is achieved - a primary support for steady to
perhaps fractionally lower mortgage interest rates will remain firmly in place.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
