It was a three-day weekend and many turned it into a four-day affair. The Bureau of Labor Statistics came out with its monthly unemployment report and non-farm payroll numbers. “Experts” were anticipating another drop in unemployment from 5.3% to 5.2%.Real Estate investingWhat they got was a slightly bigger drop to 5.1%.

The unemployment rate indeed has been on a gradual decline but then again so are the number of people in the workplace. Again, according to the report, the Labor Participation rate fell to its lowest level in nearly 40 years at 62.6%. Fewer active workers will cause the unemployment rate to fall as the available pool of workers shrinks.

The number of new jobs was a bit disappointing but that really depends upon one’s perspective. The U.S. economy added 173,000 new jobs, 47,000 fewer than expected. Yet August has been consistent for being inconsistent as it relates to job count and it very well be related to summer vacations. Seriously. As employers are polled each month, for some reason August shows a few absentee companies and they don’t report. That’s a theory anyway but it makes some sense. Whatever the reason, August job numbers are almost always revised upward and in a big way. 

However, the revision won’t take place until way after the Fed holds the next round of FOMC meetings on September 16 and 17. And it’s anybody’s guess if the Fed will in fact adjust the Fed Funds rate at that time but you can’t ignore the unemployment rate. You also can’t ignore wage gains which came in at a 2.4% annualized rate. As people do leave the workforce, wages will tend to rise and more hours worked. This in fact is happening right now. For mortgage rates, we might see a slight bump in rates if the Fed does indeed move next week but don’t expect any large increase.