Good and Bad Jobs News

In This Issue

Last Week in Review: The Jobs Report for November was released. What did the data show, and how did home loan rates react? Forecast for the Week: Look for important news on inflation and retail sales. Plus the Fed meets. View: Many people have a fear of public speaking. Be sure to share these simple tips with your clients, colleagues, and referral partners.

Last Week in Review

"Life is a mixed blessing, which we vainly try to unmix." Author and journalist Mignon McLaughlin. And the Jobs Report for November turned out to have some mixed data, though un-mixing the numbers is important for us to do. Read on for the details and the latest news on home loan rates. On Friday the Labor Department reported that employers added 146,000 new jobs in November, well above the 90,000 that was expected. In addition, the Unemployment Rate hit 7.7%, the lowest level since December of 2008. On the surface, both of these figures seem like a positive sign for the labor market. But it is also important to understand that the decrease in the Unemployment Rate was due in part to 350,000 people dropping out of the workforce. And that's why the Labor Force Participation Rate (LFPR) fell to 63.6%, the lowest reading in over 31 years. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don't. The ratio of people "participating" or working is then compared to the total population. In addition, the biggest increase in jobs was seen in the retail sector, which was probably due to seasonal holiday hiring. So what does this mean for home loan rates? Bonds and home loan rates worsened slightly last week, in part due to the positive headline numbers from the Jobs Report. But there is still much uncertainty in the markets, both here due to the ongoing Fiscal Cliff saga and the continued uncertainty in Europe. This means that investors will likely continue to see our Bond market as a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, this continued uncertainty could benefit home loan rates as well. The bottom line is that home loan rates remain near historic lows, making now a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Dec 07, 2012) The second half of the week heats up with several important reports. Economic data doesn't begin until Thursday with Weekly Initial Jobless Claims. Claims have been moving lower the past few weeks after the big spike higher in November due to Superstorm Sandy. Retail Sales will also be delivered on Thursday. A double dose of inflation news ends the week, with the wholesale-measuring Producer Price Index on Thursday, followed by the Consumer Price Index on Friday. In addition, the last Federal Open Market Committee meeting for 2012 will be held on Tuesday and Wednesday, and that always has the potential to move the markets. 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 reacted negatively to the better than expected Jobs Report for November. But home loan rates remain near historic lows and I will continue to monitor their movement closely.

The Mortgage Market Guide View...

Easy Presentation Tips For many people, public speaking is one of their greatest fears. And the task of speaking to groups large and small can seem daunting! What if you deluge people with too much information, give them too many options, talk too much, bore them, or speak in jargon they don't understand? The good news is that there are some simple tips that can help make any presentation shine: Give the big picture. People love stories, so use ones that illustrate how your ideas fit together. This will help people visualize and, more importantly, relate to what you're telling them. Stories will also help people relate to and connect with you, helping you build rapport in the process. Short is sweet. Don't spend too much time getting to the point. As Winston Churchill once said, "The head cannot take in more than the seat can endure." Tell them what you want them to do. Most salespeople know how to ask for the sale, but often forget to ask for everything else. If you want agreement, ask for it. If you need information, ask for it. And most important of all, say "thank you" when you get it! Be conversational. The fastest way to lose people is corporate-speak, jargon, or using big words when small ones will do. Whenever you are presenting, just imagine yourself sitting next to someone you are comfortable with for a friendly chat. Economic Calendar for the Week of December 10 - December 14 Date ET Economic Report For Estimate Actual Prior Impact Wed. December 12 12:30 FOMC Meeting Dec NA 0.25% HIGH Thu. December 13 08:30 Jobless Claims (Initial) 12/8 375K 370K Moderate Thu. December 13 08:30 Retail Sales Nov 0.4% -0.3% HIGH Thu. December 13 08:30 Retail Sales ex-auto Nov 0.0% 0.0% HIGH Thu. December 13 08:30 Producer Price Index (PPI) Nov -0.5% -0.2% Moderate Thu. December 13 08:30 Core Producer Price Index (PPI) Nov 0.1% -0.2% Moderate Fri. December 14 08:30 Consumer Price Index (CPI) Nov -0.2% 0.1% HIGH Fri. December 14 08:30 Core Consumer Price Index (CPI) Nov 0.1% 0.2% HIGH

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