The Bureau of Labor Statistics is getting caught up on their getting caught up on their economic reports that were not released during the government shut down a few months ago. Their recently published data show that the labor market is continuing to slow down, with the unemployment rate rising from 4.4% in September to 4.6% today. The good news is that bad news for the economy usually ushers in a period of lower interest rates.
Inflation measured at the consumer level is decelerating by 0.3% annually, and current’y sits at a +2.7% year-over-year increase. Much of the shrinking calculation is derived from lower housing and fuel costs. Combined, these two factors make up the majority of the headline Consumer Price Index (cited above). A reduction in the measure of inflation is also typically associated with lower interest rates approaching on the horizon.
However, several of the world’s largest economies (read: countries) have been raising their interest rates this week. There are any number of reasons why they may choose to do that. Germany and Japan’s Central Banks’ Bond rates are now at the highest they’ve been in the last 10 years. So despite the two behemoth factors mentioned above aligning with the path that would lead mortgage rates to decline, there is greater pressure from the world economy and interest rates rising around the globe that are preventing our domestic long-term rates from becoming more consumer friendly.
