Your Chicago Real Estate and Mortgage News for March 9th

Interest rates fell slightly last week on some rather dismal news on employment and the economy as a whole. In addition, the bond markets were helped by the stock market, which continued its free-fall into territories we haven't seen in over 12 years. This week is a "slow news" week on the economy, so the bond market will mainly be watching the stock markets for direction. Keep in mind that as the stock market falls, that is usually good news for interest rates, as investors pull their money out of the stock market and put it into bonds, which are considered to be a safe haven.

Here's a look at the news that came out last week:
On Monday, Personal Income and Spending both came in better than expected, while the Fed's favorite inflation gauge - the Personal Consumption Expenditures index came in as expected. The Industrial Supply Manager's (ISM) Manufacturing Index came in better than expected, but still "not so good". Wednesday brought us the ADP employment report, that estimated 697,000 jobs were lost in February, compared to the street estimate of 630,000. The ISM Services Index came in slightly better than expected. We also heard more of the details of the "Making Home Affordable" housing plan that was announced a couple of weeks ago. If you or your past clients have tried refinancing recently, but were unable to due to the changes in the mortgage industry, please call us to see if the "Making Home Affordable" plan will help with your situation. Thursday we learned that first time Unemployment Claims came in slightly better than expected, but still at 639,000 new claims. Also, Productivity at the nation's factories fell in the 4th quarter of 2008 more than anticipated. Friday was the big day of the week and month, as the U.S. Labor Department released employment numbers for February. We learned that the we lost 651,000 jobs, close to expectations, but the unemployment rate jumped to 8.1% - the largest number in over 25 years. December and January's employment numbers were revised to show an additional 161,000 jobs lost, giving December the largest number of jobs lost in the post war (WWII) era. When it was all said and done for the week, bad news prevailed, and interest rates declined.

The week ahead will bring us the following:

Thursday - First Time Unemployment claims are expected to remain steady from last week. Thursday - Retail Sales are expected to show a large decrease from January to February.
Friday - The U.S. Trade Balance is anticipated to show an improvement
Friday - Consumer Sentiment will probably show a decrease from the last reported, considering all of the dismal news released lately.