Keeping You Updated On The Market

Mortgage Rate Outlook

Measures of consumer moods recently moved off lows, following the decline in gas prices. During September, the Conference Board’s review of Consumer Confidence ticked up to a reading of 59.8, up from August’s 56.9 level and exhibiting mild but steady improvement off June’s lows.

If job markets continue to decline, such optimism may grow harder to find. Weekly unemployment claims rang in at a hurricane-goosed 497,000 for the week ending September 27, but regardless of the reason, new claims remain high. As well, while the loss of jobs during this downturn has been mild compared to historical patterns, it does seem to be deepening.

In September, the economy shed 159,000 jobs, the ninth consecutive month of job losses, now nearly at an accumulated 750,000 since the turn of the year. The nation’s unemployment rate remained at 6.1% for the month, but given the gyrations in financial circles over the past fourweeks, and other markets so dependent upon them, more layoffs seem destined to come.

Now that we’ve got a "rescue" or "support" plan in place – please don’t call it a "bailout" — where do we go from here? Financial conditions should be improving, at least slightly, in the weeks ahead; inflation seems to be waning, at least for the moment, and markets have been flooded with liquidity, not that it’s making it out to main street just yet.

 We’re hopeful that it will; in these times of unprecedented government moves to kick-start markets, it’s no longer too far-fetched to think that more aggressive and direct government moves into other areas of lending can’t occur, if the banks remain unwilling or unable to do it. More likely, pressure will be exerted to get things moving, even if rates don’t fall right away. We’ll see where that goes.