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February 2, 2024
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February 2, 2024
It Was a Yo-Yo Week With Conflicting Jobs Reports
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It was a yo-yo this week with lots of economic news and data coming out. Rates declined .25% earlier in the week and then gave all of it and more back today!
Jerome Powell and the Fed met this week and left the federal funds rate alone. Their next meeting is March 20th, where they will likely still hold rates steady. Then on May 1st, we should see the start of a slow and steady decline.
The big news actually focused on jobs numbers. There were huge discrepancies in the ADP report versus the BLS (Bureau of Labor Statistics) report released Friday. Wall Street is very focused on the jobs reports.
The dreaded BLS jobs report showed much higher than expected job creations of 353,000! When a report is released, there are “headline numbers” that Wall Street reacts to before they can really dive deep into the numbers. The BLS report is riddled with HUGE seasonal and annual adjustments, making it almost impossible to decipher.
With the stark contrast in the two jobs reports - ADP vs BLS - uncertainty prevails. Uncertainty can paralyze a market. They don’t want to be on the wrong side, so they err on the high side.
All that said, don’t panic! Inflation is coming down, people are living on credit, jobs are not as robust as reported, and interest rates will drop this year. As mentioned previously, Fannie Mae predicts rates to be in the 5s by the end of 2024.
With these elevated rates, the real estate market appears to be on pause with respect to increasing values. This may give more homebuyers a little more time to jump in before rates drop and the buying frenzy begins.
Stay tuned!
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