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Unemployment Rate Rises

Saturday, February 2, 2013   /   by June Quilantang

Unemployment Rate Rises

In a week packed with big economic news, investors feared that the trend toward higher mortgage rates seen this month would continue. The risk that the Fed might signal a scaling back of its MBS purchases concerned investors. In the end, though, a neutral Fed statement and an unexpected increase in the Unemployment Rate allowed mortgage rates to reverse early increases and end the week with little change.


Wednesday's Fed statement was very similar to the statement issued after its December meeting. Concerning its MBS purchase program, the intention stayed the same, meaning that the Fed will continue buying MBS until the Unemployment Rate drops to 6.5%, as long as inflation doesn't increase too much before then. The Fed is the largest buyer of MBS and its demand helps keep rates low. The Fed statement reduced concerns that the MBS purchase program might be cut sooner than previously expected.


Against a consensus forecast of 180K, the economy added 157K jobs in January. The figures from the prior two months were revised significantly higher, raising the 3-month average above expectations. The Unemployment Rate climbed to 7.9%, though, above the consensus for a decline to 7.7%. The increase took place because the labor force grew more quickly than the number of jobs. Bottom line, job growth was a little stronger than expected overall. But with the Fed specifically targeting the Unemployment Rate to determine the duration of its bond-buying program, the increase to 7.9% was favorable for mortgage rates.

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The data relating to real estate for sale or lease on this web site comes in part from MHMLS. Real estate listings held by brokerage firms other than eXp Realty - New York Real Estate Experts are marked with the MHMLS logo or an abbreviated logo and detailed information about them includes the name of the listing broker. The information appearing herein has not been verified by the Mid-Hudson Multiple Listing Service, Inc. or by any individual(s) who may be affiliated with said entity, all of whom hereby collectively and severally disclaim any and all responsibility for the accuracy of the information appearing at this web site, at any time or from time to time. All such information should be independently verified by the recipient of such data. This data is not warranted for any purpose. ©2020 Mid-Hudson Multiple Listing Service, Inc. All rights reserved.