Jobs Report is Good, But is it Good Enough to Push Rates Higher?

Jobs Report is Good, But is it Good Enough to Push Rates Higher?The October jobs report blew past expectations, and that should put borrowers on notice that interest rates could climb higher on mortgages and other financial products.
The U.S. economy added 204,000 non-farm jobs in October, said the Bureau of Labor Statistics Friday. That’s way above the Wall Street consensus estimate of 122,000.
The unemployment rate increased to 7.3 percent, compared to 7.2 percent in September.
The jobs report is solid, but not good enough to push interest rates higher on your CD.
The report certainly gives the Federal Reserve some incentive to consider pulling back on its stimulus policy of purchasing $85 billion in bonds and mortgage-backed securities every month. This policy is keeping rates on mortgages lower than they would be without the Fed program.
A pre-2014 tapering is still possible. A positive jobs report has moved the tapering discussion “from March to December,” Art Hogan, market strategist at Lazard Capital Markets, told CNBC. At least until the next jobs report.
The average 30-year fixed-rate mortgage is just below 4.2 percent this week, Freddie Mac said. That’s still firmly in historically low territory, although it strayed above 4.5 percent over the past few months as speculation heated up that the Fed would “taper” its policy later this year.
Mortgage shoppers should be cautious. A growing economy translates into higher interest rates sooner or later.

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