The Labor Department reported this morning that there were 524,000 jobs lost during the month of December. This was worse than expectations of 500,000 - but much better than rumors of a far worse number, especially considering the ugly ADP numbers released earlier this week. All told, there were 2,600,000 jobs lost in 2008 - but get this, with 1,900,000 of those jobs lost in just the last three months of the year. This past year showed the biggest job loss in any calendar year since 1945, when 2,750,000 jobs were lost as the wartime economy was demobilized.
Adding further sting to the report was the Unemployment Rate, which shot up higher than expectations to 7.2%, the highest reading in 16 years. Additionally, more heavy downward revisions to previous numbers were reported, removing an additional 154,000 jobs in October and November. All in all this was a very weak report, and since the release Mortgage Bond prices have bounced around and are presently slightly lower.
The results are in on the Fed’s first run at purchasing Mortgage Backed Securities under their new $500B buying program. The Fed announced yesterday afternoon that over the past week, they bought $10.2B of Fannie Mae, Freddie Mac and Ginnie Mae Mortgage Backed Securities, and the increased buying demand has kept Bond prices moving in a sideways to slightly higher pattern this week.
In other news, Citigroup reached an agreement with top Senate Democrats that would allow judges to set new repayment terms for millions of mortgage holders who do wind up in bankruptcy court. Not a huge surprise, given the number of mortgages that are being modified at the present time - but is likely the first of several measures being considered by the government to help trim the principal owed by homeowners who have mortgage balances which are larger than the current value of their house. Some are questioning if this could have caused Bond prices to worsen yesterday…and while lenders are looking to protect their rate sheets wherever they can, it’s difficult to gauge if this really had an impact.
