Good news for rate shoppers last week. 
The Unemployment Rate increased to 9.5% in June, a 25 year high. Job losses in June came in @ 467k. Expectations were @ 363k.
Combined, Thursday’s data will add more pressure to move mortgage rates lower.
As the unemployment rate increases, households have less disposable income to pump back into the economy.
Because consumer spending accounts for two-thirds of the economy, the growing ranks of the unemployed are forcing markets to change expectations about when the U.S. economy will reach its full recovery.
Inflation is the enemy of mortgage rates. The perceived absense of inflation, therefore, can be its friend.
With fewer working Americans, we can expect slower economic growth plus a smaller probability for inflation over the medium-term. This is why mortgage rates are lower of late, off by as much as a half-percent from the peak.
Posted by Scott Fowler. Scott is a Partner and Sr Loan Officer with Horizon Financial, Inc. He can be reached toll free @ 877-627-9211 x 104 or SFowler@HorizonFinancial.org . You can visit his website @ www.ScottFowlerTeam.com .
