10/29/09

Good morning. Early this morning mortgage rates started slightly weaker after two strong days of price gains as the stock market improved. At 9:30 the DJIA opened +60 and mortgage prices were slightly worsened.

Weekly jobless claims were down this morning, but not as much of a decline as expected. Declining continuing claims would normally be a positive for the employment outlook if this were a normal recession. Not the case; continuing claims are likely declining as unemployment benefits are ending for many that lost jobs six months ago with no extension from the Obama administration. The take away from the claims data today, as is the case every week, 500K+ a week are losing jobs and has been going on for all of this year. Job losses at 2 mil a month isn't a building block for economic recovery no matter how it is spun. Lipstick on the pig isn't enough to take it to the prom. Also at 8:30 the first look at Q3 GDP was better than expected. The better growth triggered buying in the stock index futures and drove the stock market to a better open at 9:30.