Seattle Real Estate Mortgage Rates Today 8/5/11: The ongoing weakness in economic data brought a 500+ point drop for stocks yesterday.  However, with the positive Jobs Report stocks are rallying higher and attempting to reverse the downfall.

With 33,000 more jobs than the anticipated 84,000, the month of July was positive concerning the Jobs Report.  On an even better note, the Labor Department revised the numbers for May and June and added another 56,000 more to the expected 100,000 already reported.  The Unemployment rate fell ever so slightly from 9.2% to 9.1%; this is below the anticipated 9.2%

The labor market also is the bearer of good news.  The Average Workweek was stable at 34.3 and hourly earnings rose from .2% to .4% in June.  Since this increase is something we have not seen in quite some time, the Fed must watch this closely.  As hourly earnings slowly rise, wage-based inflation may be on the horizon.  With the unfriendly relationship between bonds and inflation, the surprise in hourly earnings may be a reason for some mortgage bond deterioration.

Although the Jobs Report was surprisingly positive, we need to pay attention to upcoming economic data.  Mortgage Bonds are lower given the numbers this morning.  There are many long-term problems in Europe and a general, sluggish global economy; this should add support to bonds.

Mortgage Backed Securities (MBS) hit their lows upon the news that the ECB said it will purchase Italian and Spanish bonds; with stocks rallying, rates should be watched.

Of note, Goldman Sachs commented that there is a 33% chance the U.S. will find itself in a recession.

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