Official Employment Situation Report Findings Mean Mortgage Rates Will Remain Low

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On the first Friday of every month, the official Employment Situation Report is released. It measures the health of the job market, which is the power behind consumer spending. The latest report left economists rather disappointed, although the unemployment rate did decrease.

When measuring the market, economists pay attention to four metrics. First they look at Nonfarm Payrolls. This number is the total amount of jobs added or subtracted from company payrolls in the previous month. The second metric used to measure the market is the Unemployment Rate. For those who can't remember back to Econ 101, this is the percent of working-age Americans who are out of work. The third metric is Average Hourly Earnings. This number is the amount of money the average worker earns per every hour of work. Lastly, the average work week is determined. The amount of hours worked by an individual per week is averaged.

The recent Official Employment Situation Report showed that the unemployment rate, average hourly earnings, and average work week all improved above expectations. The unemployment rate improved, but there is speculation that it was largely due to the decline in the civilian labor force. The civilian labor force consists of willing and able workers. When civilians grow restless of looking for a job, they are referred to as "discouraged workers" who are not counted in the official unemployment rate.

Consumers with jobs can rejoice knowing that the average hourly earnings and average work week improved. This means Americans are being paid more per hour, and working more hours a week. The more money made means more money spent.

Nonfarm Payrolls was the only factor to do worse than expected. Payrolls grew, but 411,000 of those jobs could be attributed to the Census. Census data collectors were hired on a temporary basis, providing 391,000 jobs. Only 20,000 were created in May without considering Census employees. Compare that to the 66,000 jobs created in April, and May was a lackluster month.

As a result of the Official Employment Situation Report, Mortgage rates have remained low. The 30 year fixed mortgage rate is still between 4.625% and 4.875%. If you do not plan to keep your home for more than five years, go with a no cost loan. You could find one in the 5.37% to 5.5% range right now.