After a slight sell off yesterday of mortgage backed securities, today we have opened in positive territory after weak economic data was released. First, we got the release of the weekly jobless numbers which showed that 589,000 people filed for unemployment and the continuing claims also moved higher by 92,000 to 4.6 million. This shows that the jobless cannot find work so the jobs outlook continues to be very weak. Each week I bring you the jobless numbers but I have never defined it so here is the definition from Bloomberg, New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market.
We also got the release of housing starts. Economist’s where expecting 610,000, but the number came in worse at 589,000. Since we have a glut of homes on the market now, I see this as a positive that less new homes are being built. However, with fewer homes being built that will lead to higher unemployment in the construction industry, less consumer spending on appliances, flooring, etc which is continued bad news for the economy.
From early reports, lenders rate sheets are slightly worse in price by .10 in discount. No major reports will be released tomorrow. As I have been typing this update, mbs have given back the gains of this morning and are currently unchanged from yesterdays close.