Unemployment is Down Across the Country

The good news: In June the U.S. workforce shrank. That’s the first time since December 2009!  Iowa has followed the same trend as the rest of the country.

According to the Bureau of Labor Statistics (the people that track this stuff), the economy lost 125,000 jobs last month even as the Unemployment Rate dropped to 9.5 percent. The drop in the Unemployment Rate is being attributed to fewer Americans looking for work.

At first look, the jobs report seems weak but if you take a deeper look it shows something different.

Excluding the 225,000 government Census workers that recently left the workforce, the total number of employed persons actually grew by 83,000 in June. That’s 50,000 more working Americans as compared to May.

And, since the start of the year, the U.S. workforce has grown by 857,000.

Jobs growth is closely tied to economic growth because more working Americans means more disposable income which, in turn, stokes consumer spending. Job growth is better than job loss.

Mortgage Rates in Iowa Will Be On the Rise

Consumer spending makes up the majority of the U.S. economy so as consumer spending grows, investor mentality tends to shifts toward “return on principal” (i.e. stock markets) from “safety of principal” (i.e. bond markets). Technical, right?

A move like this is often bad for home affordability because falling demand for bonds is tied to higher mortgage rates. In addition, with the growing number of Americans earning a paycheck, demand for homes is likely to increase, thereby helping to push home prices higher.

Overall, therefore, the jobs report should be bad for rate shoppers and home buyers in in Ankeny. Except, the markets aren’t reacting that way. For now, mortgage rates are slightly improved since the jobs report’s release.

Perhaps Wall Street is watching the wrong figures, but don’t let that be your loss. If you’re shopping for a mortgage in Iowa, a home Iowa, or both, now may be your best time to make a move; while rates are still low; with home prices down; before traders change their tune.

Because when markets change, it’ll likely happen fast.

If you need help with your home financing, give me a call!  I’d love to help you.  Plus, my office is right here in Iowa!

Tagged as: consumer spending, Jobs, Non-Farms Payroll