VA LOAN CAPTAIN BLOG & Learning Center

Here We Go!

By: Grant Moon 05/04/15 12:05 pm

Mortgage lenders, investors and economists always point to an upcoming economic report that could affect the markets. Positive economic news typically means money is pulled from bonds and into stocks. When that happens, the yield on the bond rises along with mortgage rates. On the other hand, when news isn’t so good the opposite happens. Investors prefer a safer path and put funds into a bond. Sure, a bond or Treasury won’t provide much in returns but they won’t lose money, either. That said, one report that could have an impact comes this Friday. The unemployment report for April.

The unemployment report along with the non-farm payroll count is usually released on the first business Friday of each month yet since the first of the month coincided with the first Friday, the numbers come one week later as the April data is collected.

You may be surprised to learn the actual unemployment rate, the one you’ll hear most about, is less important compared to the number of jobs created. The unemployment rate for March came in at 5.5% yet the real story was the paltry number of new payrolls. The markets expected a number closer to 250,000 yet the actual count was almost half that. In March, there were only 129,000 new non-farm payroll jobs. Was that an anomaly?

Maybe. That happens and when it does the next month’s numbers will be much higher than anticipated essentially because there was a miscount. If that is indeed the case when Friday rolls around, Wall Street will like the news and rates could go up. On the other hand, if another month of tepid job growth is reported, rates could benefit. Not a lot, but a little. If you’re in a position to lock your VA loan and you’re a little nervous, it might be time to make the prudent move—call your loan officer and lock your rate right now.


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