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Last Week in Review: January's Jobs Report is in - was it a good or bad one?

Forecast for the Week: It's a quiet week when it comes to economic reports, but it remains to be seen whether the news from around the world will be good or bad for our markets.

View: Need some cough syrup? Just ran out of bandages? Read this week's View article...and learn more about the new Flexible Spending Account rules...before you head to the store.

"Bad news goes about in clogs, good news in stockinged feet." Welsh Proverb. And there was certainly both good and bad news in last week's Jobs Report. Here's what we saw...and what this means for home loan rates.

The Labor Department reported that just 36,000 jobs were created in January, with only 50,000 jobs created in the Private sector, much lower than the numbers anticipated. However, there were upward revisions to both November and December, which added another 40,000 jobs than previously reported.

But that's not the only bit of good news in the report. The Unemployment Rate fell to 9%, down from 9.4% last month, rather than increasing as had been expected. In addition, the U6 or "real" rate of unemployment, which includes discouraged workers and those who have accepted part-time employment for economic reasons, fell to 16.1%, from the previous month of 16.7%...and reflects the lowest level since April 2009!

So what does all of this mean when it comes to home loan rates?

It's important to remember two things:

First, the Fed's goals for their current Quantitative Easing policy (dubbed QE2) where $600 Billion is being injected into the economy are to (1) boost Stock prices, (2) create inflation, and (3) lower the unemployment rate.

Second, while these goals are designed to stimulate our economy and keep our recovery moving forward, they are also unfriendly to Bonds and home loan rates.

In recent weeks, we've seen evidence of all three goals: Stocks been improving, the unemployment rate has declined, and we've seen an increase in global unrest of late, not just in Egypt, but in other parts of the world as well... and much of this centers around runaway inflation in commodities and food.

This means that the old trading saying, "Don't Fight the Fed" is still ringing true. If the Fed wants to accomplish its three QE2 goals at the expense of Bonds and home loan rates, they probably will.

If you have been thinking about purchasing or refinancing a home, this is a great time to get started! Home loan rates are still very attractive, so call or email me if you want to talk about your situation. Or forward this newsletter on to someone you know who may benefit from today's historically low rates.

There's a quiet week ahead on the economic report front, though with all the news happening around the world, there's plenty of action that could impact the markets. Be sure to also look for:

• Thursday's weekly Initial and Continuing Jobless Claims Report. Last week Initial Jobless Claims declined to 415,000, which was below the 425,000 expected, and reversed most of the increase from the previous week. Will this week's number also show a decline, and move us closer to that 400,000 mark, which shows the labor market is continuing to improve?

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.