Unexpected strength in the labor market was reported on Friday March 8th. The good economic news seemed to cause stocks to rise to record levels, but this alleged good news also pushed mortgage rates higher last Friday.
It was forecast that there would be 170,000 jobs added in February of this year. Since the economy added 236,000 jobs in February and the unemployment rate declined from 7.9% to 7.7%. This is “alleged good news” because the unemployment numbers do not take into account the number of people who have given up looking for jobs. If those people see this alleged improving economy and start looking for jobs again as a result, and they should get reported in the unemployment numbers again, then unemployment would actually be much, much higher.
Good economic news is bad news for interest rates in general. Since stronger economic growth generally causes mortgage rates to rise.
I’m not convinced that we are in an economic recovery. So it will be interesting to see how the economy and interest rates go the rest of the year.