Powell Shakes Markets
Happy Friday! Let’s jump into this week’s update.
Since I didn’t do an update last week, I want to start there with some big news that often flies under the radar: the QCEW annual revision. This is when employment numbers for the prior year are reviewed and adjusted. The result? A massive correction showing that job growth was overstated by 911,000 positions nationwide.
That means the monthly employment reports we all watched last year were inflated by an average of 76,000 jobs per month. The problem is that markets (and mortgage rates) react in real time when those reports are released. So, when the government said we gained 200,000 jobs in a month, markets assumed the labor market was strong, interest rates rose, and homeowners paid the price. Now, with the revision, we know the economy wasn’t nearly as strong—and rates likely should have been lower. This same kind of miscalculation happened the year before, with a revision of roughly 860,000 jobs.
All of this reinforces a bigger point: the economy isn’t on as solid footing as the Federal Reserve often suggests. Between overstated job numbers, rising unemployment, and recent soft reports, cracks are showing.
This week, the Fed wrapped up its two-day meeting. They announced a 0.25% rate cut—something the markets welcomed at first. But as soon as Fed Chair Jerome Powell began taking questions, sentiment shifted. His comments suggested that inflation isn’t much of a concern, employment looks okay, and the Fed isn’t ready to commit to a clear path of cuts. Mortgage rates actually ticked higher after his remarks, despite the rate cut.
Looking ahead, the Fed hinted at the possibility of two more cuts this year, though internal dissent makes that uncertain. For now, we’ll have to wait and see how the data (and the Fed’s interpretation of it) unfolds.
For Realtors:
We’ve launched a new class, Winning with Objections, running now through early November. Our upcoming sessions in Boulder and Denver are filling fast, so please RSVP—we’d love to see you there.
Save the Date – Fall Fiesta:
On Thursday, November 13th, we’ll host our 11th Annual Fall Fiesta at Roots Music Project. Expect incredible live music, an open bar, and all-you-can-eat tacos from McDevitt Tacos. Most importantly, we’ll be raising money for Community Food Share, which helps fight food insecurity in Boulder and Broomfield Counties.
___________________________________________________________________________
Questions? Concerns? Ready to get started with my strategic buyer consultation?
Call me any day of the week, Monday- Sunday to get connected & learn about your options.
It’s never too soon to understand what you can afford!
303-500-3839
Brian@BrianManningTeam.com
LICENSED TO SERVE YOU IN:
- Colorado
- California
- Arizona
- Florida
- Wyoming
Oh yeah, want to get my weekly Friday Market Update straight in your inbox?? Join our mailing list!
Email me directly at Brian@BrianManningTeam.com