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October 12, 2022

The Breakdown:

Labor Markets Send Mixed Messages

Not a lot of news in the Housing Market over the past week but we did receive some very important Labor Market data. The Bureau of Labor Statistics (BLS) delivered its Jobs Report and the ADP Employment Report offered some insight into private sector payrolls but the question is - what do these numbers say about the likelihood of a recession? Let's take a look.

As you may recall, the BLS Jobs Report contains two surveys: the Business Survey, which provides the headline jobs number, and the Household Survey, which provides the Unemployment Rate.

The Household Survey showed there were 204,000 job creations while the labor force decreased by 57,000. This drop in the labor force contributed to the decline in the unemployment rate, which means the decline wasn’t just due to strong job growth. In fact, the BLS reported the smallest monthly job gain in six months, of which, nearly all gains came from individuals 45 or older.

The U-6 All-In Unemployment Rate, which accounts for people who "want a job" but have not looked in the past 4 weeks, fell from 7% to 6.7%. The decrease in the unemployment rate triggered a selloff of stocks and bonds last Friday because this data gives the Federal Reserve the green light to continue hiking rates.

The ADP Employment Report came in above just expectations for September with 208,000 jobs created. The spread was pretty even across small, mid, and large-sized businesses. All of the gains were made by service providers, whereas goods producers suffered losses.

While the September employment data looks positive, we received a telling piece of news comes from KPMG Global's CEO Outlook Survey. The survey consisted of information provided by over 1,300 CEOs in some of the world's largest companies. Of the 1,300 executives, 86% expect a recession over the next year, 39% have already begun freezing corporate hiring, and 46% plan to include downsizing in their considerations for the next six months.

Overall, we received some mixed messages. This week, the markets will be anticipating the September inflation data. Stay tuned for the breakdown next week.

FHA 203(h) Disaster Victims Mortgage

Homeowners and renters whose residence has been destroyed or damaged to the point that replacement is necessary are eligible for 100% financing through the FHA 203(h) Disaster Victims Mortgage. Once the president designates a federal disaster area, the FHA 203(h)1 program becomes available so homeowners can purchase a new home.

  • For single-family homes and condominiums
  • Up to 100% financing
  • 6% seller contributions toward closing costs allowed
  • Fixed and adjustable mortgage rates2 are available
  • The maximum loan amount is the maximum FHA loan limit based on county. Most counties in Florida are limited to $420,680; Collier is $552,000.

1Purchase of a 1-unit primary residence. Owner or renter of the disaster-affected property must provide conclusive evidence that previous residence was located in a disaster area and was destroyed or damaged to the extent replacement is necessary. Borrower’s application for mortgage insurance must be submitted to the lender within one year of the president’s declaration of the disaster.

Program terms available may vary based on the state or county in which the financed property is located. Not available in Puerto Rico. Please consult your tax advisor regarding the deductibility of interest. Important information will be provided to you in the disclosures you receive after we have received your application and the loan documents you are provided at loan closing.

2With an adjustable-rate mortgage (ARM), your loan will have an initial fixed-rate period. After the fixed-rate period, your interest rate will adjust up ordown according to market rates at the time of the reset. Your payment amount will vary based on any adjustment in the interest rate after the fixed-rateperiod, and your monthly payment may increase. Your variable rate can adjust bi-annually, or every 6 months, for the remaining life of the loan.

Programs for qualified borrowers. All borrowers are subject to credit approval, underwriting approval and product requirements, including loan to value, credit score limits and other lender terms and conditions. Fees and charges may vary by state and are subject to change without notice. Some restrictions may apply. Not a commitment to lend. 8/22