The August jobs report, released this morning, is bad news for President Barack Obama, but borrowers will benefit from it.
The economy added only 96,000 jobs in August, the Labor Department says. Economists had expected at least 125,000 new jobs. Since the beginning of this year, employment growth has averaged 139,000 per month. In 2011, the monthly average was 153,000.
The unemployment rate ticked down to 8.1 percent from 8.3 percent, but it wasn't really due to job growth. It was mostly because many people quit looking for work. About 368,000 job seekers left the workforce, the report shows.
Disappointing? Not for borrowers. Right after the report was released, the yields on Freddie Mac bonds tumbled. Mortgage rates tend to follow the direction of bond yields. On Wednesday, bond yields and mortgage rates were on the rise after the European Central Bank announced a bond-buying plan that injected confidence in the global markets.
After the ECB announcement Wednesday, the yield on Freddie bonds jumped from 2.64 percent to 2.8 percent. The tepid jobs report pushed the yield to 2.57 percent this morning.
This should help hold mortgage rates near record lows this week. If you're thinking about refinancing your mortgage, this is a good time to do it.
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