April 9, 2014

Last Week in Review

Economic news was generally positive last week, starting with the Jobs Report for March. Read on for the details.

Table Source: Vantage Production, LLC

The Labor Department reported that 192,000 jobs were created in March, as much of the country thaws out from the extreme winter weather. This was in line with expectations, and it’s a strong number given the reported number of jobs created in recent months. In addition, the figures for January and February were revised higher by 37,000 jobs.

The unemployment rate ticked up to 6.7 percent from 6.6 percent, while the more important labor force participation rate (LFPR) rose to 63.2 percent from 63 percent. Though the increase is positive, it remains near 35-year lows. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

In housing news, CoreLogic reported that home prices (including distressed sales) rose by 12.2 percent from February 2013 to February 2014. This represents 24 months of consecutive year-over-year increases. In addition, from January to February, prices were up 0.8 percent. However, despite the rosy gains, prices are still nearly 17 percent below their peak set in April 2006. The big gains from 2013 are starting to cool and return to more normal historical levels.

What does this mean for home loan rates? The Fed is now purchasing $30 billion in Treasuries and $25 billion in mortgage bonds (the type of bonds on which home loan rates are based) to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing. The Fed will be closely watching upcoming reports, especially in the labor and housing markets, as it evaluates the timing of further tapering. These decisions will continue to impact our economy and home loan rates as we move ahead this year.

The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.


Forecase for the Week

After last week’s busy economic calendar, economic reports don’t begin until Thursday this week

  • As usual, weekly Initial Jobless Claims will be released on Thursday. Last week’s claims jumped unexpectedly by 16,000, reaching a one-month high.   
  • On Friday, look for news on inflation at the wholesale level with the Producer Price Index. The Consumer Sentiment Index will also be released.  

In addition, the minutes from the March Federal Open Market Committee (FOMC) meeting will be released on Wednesday, and they could provide more insight regarding tapering and the Fed’s bond buying program. 

As you can see in the chart below, Corelogic reported that home prices rose by 12.2 percent from February 2013 to February 2014. This was a big change from the 9.95 percent increase from February 2012 to February 2013. Corelogic also forecast that home prices could rise by 10.5 percent year-over-year in March. 

Chart: CoreLogic Home Price Index

Table Source: Vantage Production, LLC

The Power of “Listening Slowly”

As a sales professional or service provider, you often meet with new clients and referral partners. But even if your questions are thorough, people may occasionally give vague or incomplete answers that, when left unexplored, could significantly impact both the guidance and service you give them.

In the book, Change-Friendly Leadership, management coach Rodger Dean Duncan suggests you try a technique called listening slowly, which Duncan learned directly from PBS NewsHour anchor Jim Lehrer.

“He urged me to ask a good question,” says Duncan, “listen attentively to the answer, and then count silently to five before asking another question. At first that suggestion seemed silly. I argued that five seconds would seem like an eternity to wait after someone responds to a question. Then it occurred to me: Of course it would seem like an eternity, because our natural tendency is to fill a void with sound, usually that of our own voice.”

So, how can this technique help you in meetings? When people are left with a few moments of silence, you’ll be amazed at how often and how quickly they will offer more information that can help you better serve them.

Of course, you don’t want to pause for five seconds after every single question—strictly factual and yes-or-no questions are fine as they are. But when you’re looking for a deeper-level answer, an opinion, or an expanded view into a person’s thoughts or needs, try incorporating the magic of listening slowly into your client meetings.

Please feel free to pass this tip along to your team and colleagues.

In the news this week (April 7 - 11, 2014)