Real Estate Information Archive


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Streamside Solutions

by Catriona Tudor Erler

Nestled in Nature

by Jeanine Matlow

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Opes Advisors Weekly Economic Update

by Andy Block

        Weekly Economic Update


Jobs market is strong; Greek default closer; rate increase in September? Here is what we are watching:

Payrolls and Wages Jump

The Fed’s decision on when to lift interest rates is data dependent as we know from previous statements and a big piece of data dropped today. The May employment report was very strong as payrolls and wages both jumped. Jobs were up by 280,000 and the April gain was revised up by 32,000. Average hourly earnings increased 0.3% for a year-on-year gain of 2.3%. Both results were at the top end of analyst expectations. An economist at wrote that, “This is the best combination of numbers we have seen in many months” and the US Labor Secretary described this as “undeniably the best report of 2015.”

On Thursday, the Labor Department reported applications for unemployment benefits fell to 276,000. Applications have been below 300,000 for 13 straight weeks – an indicator of increased job security for Americans. 

Good news, but …

Some trends were mixed. More Americans are working boosting the labor participation rate to 62.9%, although this is still trending at a historically low level. And more Americans are optimistic about the job market and hunting for work again, which increased the unemployment rate from 5.4% to 5.5%. The number of part-time workers who want full-time work remains stuck at 10.8%. 

Average hourly earnings looks like the number to watch. Rate hawks at the Fed are looking for signs that inflation is heating up and if a tightening labor market leads to higher wages, policy is sure to swing clearly in the direction of a rate increase. As a result, investors were jittery after the data release today with bond yields increasing. This will mean more expensive mortgages for US home-buyers. 

Greek Default?

Greece moved a few steps closer to the edge of the cliff this week by delaying debt payments. Prime Minister Alexis Tsipras’ comments that the conditions attached to the release of bailout funds were unrealistic, humiliating and amounted to strangulation were less than diplomatic and suggest that Greece is increasingly desperate to both secure the funds needed to stay solvent and turn back the austerity measures that have reduced GDP by 25% and increased unemployment to 26%. Many leaders in the governing party are vehemently against any concessions to the country’s lenders. 

A Greek default would likely not be a financial catastrophe, but it may trigger a chain of outcomes that Central Bankers are unable to predict or control. The Fed will want to consider when to time a rate hike to avoid disrupting financial markets if a default happens, which may moderate pressure from a strong jobs market.

While Opes Advisors, Inc. uses all reasonable efforts to ensure that the information contained in this email is current, accurate and complete on the date of publication, no representations or warranties are made (express or implied) as to the reliability, accuracy or completeness of such information. Opes Advisors, Inc., therefore, cannot be held liable for any loss arising directly or indirectly from the use of, or any action taken in reliance on, any information appearing in this email.

Andy Block

Mortgage Advisor and Personal Finance Advisor

NMLS 293174

(650) 931-0605 Office

(650) 533-0756 Cell

Respectful Renovation

by Ronda Swaney

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Displaying blog entries 1-4 of 4