Job Report for June a Dud, and When is the best time to Post?

In This Issue

Last Week in Review: The Jobs Report for June was released...and it fizzled. Find  out why. Forecast for the Week: The second part of the week heats up, with news on  inflation and consumer sentiment, and the minutes from the Fed’s latest meeting. View: Twitter can be a great tool for business...especially if you know how to use  it effectively. Be sure to read...and pass on...the details below.

Last Week in Review

"You’re a firework." Katy Perry. And while the fireworks might have been booming  during last week’s July 4th holiday, the Labor Department’s Jobs Report for June  fizzled out. Read on for details and what they mean for home loan rates.  Last Friday, the Bureau of  Labor Statistics reported just  80,000 jobs created in June,  with 84,000 private job gains  offsetting 4,000 government  job losses. Revisions to  previously reported April and  May numbers resulted in an   additional 1,000 jobs lost.  For the first quarter of 2012,  the US economy put on an  average of 225,000 Jobs.  But in the second quarter,  the economy averaged just  75,000 job creations!  In addition, the Unemployment  Rate held steady at 8.2%  and the Labor Force  Participation Rate (LFPR)  was unchanged at 63.8, remaining at a 31-year low. This is a real headwind to  the US economy as we need more people "participating" or working relative to  those who are not. And that is simply not going to happen as long as the  US economy continues to muddle along with 2% GDP growth.  The real question to ask is: Was the report ugly enough to guarantee another  round of Bond buying, known as Quantitative Easing or QE3? It’s important  to note that additional hints of QE3 could initially push Stock prices higher,  shifting cash out of the Bond trade and hurting home loan rates (which  are tied to Mortgage Bonds) in the process. This is an important news story  to watch in the weeks ahead!  The bottom line is that home loan rates remain near historic lows  and now continues to be a great time to purchase or refinance a home.   Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jul 06, 2012)   The economic calendar is light this week…but there are a few big reports due out. Here’s what  you need to watch: On Wednesday, the Fed will release the Meeting Minutes from its last Federal Open Market Committee meeting and the text could lead to an uptick in volatility. The first economic data point doesn't come until Thursday with Weekly Initial Jobless Claims. Last week, the number fell by 14,000. That was the first fall below 380,000 since May. Friday's data includes inflation at the wholesale level with the Producer Price Index (PPI). Finally, Consumer Sentiment also rounds out the week on Friday. In addition to those reports, it’s important to note that summer kicks into high gear starting this week, which means that volumes tend to slow on Wall Street as traders and investors take vacations. When trading volume slows, it tends to lead to increased seesaw trading, where the highs and lows could be magnified. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on. When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse. To go one step further - a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. As you can see in the chart below, Bonds and home loan rates continue to reach record best levels. I’ll be watching closely to see what happens this week.

The Mortgage Market Guide View...

Tweet on Saturday: Best Practices for Twitter! A new study titled Strategies for Effective Tweeting: A Statistical Review provides scientifically based advice to help you use Twitter more effectively. The study looked at “engagement” (by which it means retweets and replies). According to the results, brands get 29 percent more engagement from their followers when they tweet on Saturdays. That’s an even more interesting stat when you consider that only about 7 percent of tweets coming from brands actually arrive on a weekend. And here are a few more tidbits from the report: The rule of 4: Research indicated that 4 tweets per day was the most effective amount—any more than that, and engagement dropped off as people’s attention waned. Twitter during day: Brands received 30 percent more clicks when they tweeted between 8:00 a.m. and 7:00 p.m. Facebook at night: When it comes to using Facebook to post messages, brands saw a 17 percent increase during “non-busy” hours. Those are just some of the highlights from the study that was released in a white paper. You can download a copy of the entire white paper at http://forms.buddymedia.com/whitepaper-form_strategies-for-effective-tweeting.html. The white paper even includes a cheat sheet to help you make sure you’re following best practices when you Tweet! Economic Calendar for the Week of July 09 - July 13 Date ET Economic Report For Estimate Actual Prior Impact Wed. July 11 02:00 FOMC Minutes 6/20 HIGH Thu. July 12 08:30 Jobless Claims (Initial) 7/07 375K 374K Moderate Fri. July 13 08:30 Producer Price Index (PPI) Jun -0.8% -1.0% Moderate Fri. July 13 08:30 Core Producer Price Index (PPI) Jun 0.2% 0.2% Moderate Fri. July 13 10:00 Consumer Sentiment Index (UoM) Jul 73.5 73.2 Moderate

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