Province Mortgage

Coffee Cup Salute

July 8, 2012 by · Leave a Comment 

Province Mortgage Associates is featured in the WJAR Channel 10 Coffee Cup Salute. This video feature discusses our steady growth during the mortgage market bust and economic downturn of the last several years as well as honors us as being voted one of the Best Places to Work by the Providence Business News in 2011 for the third year in a row!

Original Article: http://www2.turnto10.com/lifestyles/2011/may/17/coffee-cup-salute-province-ar-492239/

Employment Situation Prediction for August 5th, 2011

August 4, 2011 by · Leave a Comment 

Non-farms payrolls expected up 90,000; Unemployment rate believed steady at 9.2%; Weak GDP growth seen as a major obstacle

A meaningful correlation exists between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

Economic data has gradually worsened as the months of 2011 have passed, and at no time was that more apparent than last Friday, when total Gross Domestic Product growth since January 2012 was announced at less than 0.5%. This figure was far lower than expected, especially considering the downward revision of 1st quarter growth from 1.9% annual to 0.4% annual growth. While the 2nd quarter slowdown earlier believed to have been principally driven by supply interruptions precipitated by natural disasters, it now appears that the problems were farther reaching.

Another recent concern in the economy has been energy prices, which attracted significant attention in earlier months as the price of oil surged over $100 per barrel. This afternoon, oil sold off sharply, ending below $90 for the first time since February, as the US dollar was strengthened by the announcement that Japan will take action to weaken its currency versus the dollar. The Euro remains under significant pressure due to the continued concerns about its member nations’ sovereign debt. Worries have proliferated since July, as previously stable countries Spain and Italy have seven yields on their sovereign debt rise by hundreds of basis points in the last few weeks.

ADP released the results of its July survey of employers, saying that it believed private companies had added 114,000 positions to their payrolls in the most recent month. This is somewhat consistent with that company’s announced results last month, when it announced 157,000 jobs had been added. Last month, though, the Bureau of Labor Statistics announced only 18,000 jobs had been added, though, significantly off the figure announced by ADP. It is unlikely that 114,000 jobs is enough to meaningfully impact the current 9.2% unemployment rate.

Based on this data, my models have developed statistically significant predictions ranging from 82,000 to 93,000 jobs added by private employers. The correlation between ADP and BLS data again failed to achieve significance over the short term, and last month’s miss worsened the situation. As a result, the data derived from that method have been given reduced consideration. Last month, I believed that the ADP results might be anomalous, and I was later proven correct, although I underestimated the size of the error. That ADP shows 100,000 jobs added 2 months in a row suggests that there may be a trend starting. I have developed a prediction that tomorrow’s report will show 90,000 jobs added to private payrolls in July.

Governments are continuing to reduce employment. The most recent visible episode is the recent shutdown of the Federal Aviation Administration, which resulted in the layoff of tens of thousands of employees. Because of the reductions in government employment, the total number of jobs added in tomorrow’s report will be reduced by 25,000 positions, bringing the total to 65,000 jobs added.

The official unemployment rate climbed to 9.2% in July, and the situation hasn’t changed significantly since then. If anything, the barrage of negative news may have caused more of the long-term unemployed to give up their search for unemployment. I don’t believe this phenomenon has accelerated to the point where it will affect the unemployment rate in July. I expect the unemployment rate to hold at 9.2%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for July 8th, 2011

July 7, 2011 by · Leave a Comment 

Non-farms payrolls expected up 110,000; Unemployment rate expected steady at 9.1% as manufacturing growth slows

A meaningful correlation exists between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

2011 has been characterized by a gradual worsening in the character of released economic data. While growth in 2010 was at its strongest in several years, GDP growth in the 1st quarter of 2011 declined to 1.9%. Economic growth was further questioned as that quarter drew to a close with the natural disasters in Japan and New Zealand, and the resultant interruption in supply of intermediate goods and raw materials. A spike in petroleum prices further threatened growth. It was thus unsurprising that manufacturing data, especially, retreated as May arrived. No where was this more noticed than in the Philadelphia and Empire State Manufacturing Indexes.

Oil prices have declined since then, principally driven by recent strength in the dollar relative to other currencies, especially the Euro. Still, at over $98 per barrel, oil prices have risen faster than nominal inflation, and the dollar is under pressure from the Euro again. While the immediate situation in Greece has been resolved, and while. if not so large,Portugal’s situation is at least as dire, threats on the stability of the currency remain, which have made the dollar more attractive. Threats against the dollar have not been completely eliminated, though, due to the ongoing debate regarding the US Treasury’s borrowing limit, which could severely damage the dollar’s strength.

ADP today released the results of its survey of employers, saying that it believed 157,000 positions had been added to private employer payrolls in June of 2011. This represents a quick reversal in employment, and is nearly high enough to be sufficient to lower the unemployment rate from its current 9.1% level. June’s growth, though is still well below the level of improvement seen in the first few months of this year.

Based on this ADP data, my models have produced reliable predictions ranging from 134,000 to 165,000, with most indicating highest confidence at approximately 140,000. The correlation between ADP and BLS data still failed to hold over the short term, although it has shows signs of improvement. As a result, data obtained using this method have been given reduced consideration. In spite of these figures, I believe that the ADP results may be anomalous, and have thus tempered my own predictions. I have developed a prediction that tomorrow’s report will show 130,000 total jobs added to private payrolls in June.

Governments are continuing to reduce employment, with no greater evidence of this the shutdown of the state of Minnesota that is currently in its 6th day.  Because of the impact of government employment reductions, government employment will reduce total employment gains by 20,000 positions to 110,000 jobs added total.

The official unemployment rate rose to 9.1% in May, as, in spite of meaningful increases in employed residents, even more previously discouraged workers returned to the labor force. I believe that the opposite effect will be seen in June, as the volume of negative news likely caused more workers to give up their searches. Due to this decrease in the labor force, the unemployment rate is expected to decrease to 8.9%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for June 3rd, 2011

June 2, 2011 by · Leave a Comment 

Non-farms payrolls expected up 115,000; Increase in discouraged workers to continue driving unemployment rate

A meaningful correlation exists between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

While economic data in January and February suggested continued strong economic growth, the direction of that data began to turn in March, as war and natural disasters pressured commodity prices and interrupted material supplies. This trend continued in April, as elevated oil prices raised questions the cost of oil would itself impact economic growth. Those concerns began to play out in May, as several significant economic activity surveys, including the important Philadelphia and New York Fed surveys, showed a sharp decline in underlying economic growth. In addition, weekly claims for unemployment benefits have climbed significantly, a disturbing trend as it could eventually impact hiring.

While oil prices have moderated slightly, the price of oil, currently $100 per barrel, remains at a high enough level that it could continue to impair economic growth. A significant contributing factor in high oil prices is the weakness experienced by the US dollar in currency markets, which directly impacts oil prices because most oil is paid for and purchased in dollars. The dollar is not expected to strengthen in the immediate future given questions about the level of US Treasury debt and the significant supply of currency that has come about due to recent Federal Reserve stimulative measures.

ADP released the results of its survey of employers, saying that it believed 38,000 private payroll jobs were added in May, 2011. This represented a sharp decline in employment growth, and is a low enough gain that it could likely result in a meaningful increase in the unemployment rate, especially if discouraged workers resume their employment search. It also interrupts a period of over 5 months of greater than 170,000 jobs added.

My models produced reliable predictions ranging from 35,000 to 161,000 private payroll jobs added in May, with a higher confidence range between 100,000 and 130,000. The correlation between ADP and BLS private payroll data still failed to hold true in the short term, but it did continue to move closer to signficance. As a result, data derived from that method were given reduced consideration.  I have developed a prediction that tomorrows report will show 130,000 private payroll jobs added in May.

Governments are continuing to cut employment, which is dragging on overall jobs creation. These cuts will lower total job additions to 115,000 for May.

The official unemployment rate rose to 9.0% in April, as some discouraged workers did return to the labor force. I had previously predicted the unemployment rate would be moving higher because of returning workers. That will not be a meaningful contributor to tomorrow’s unemployment rate; rather the decline in jobs growth will be a more important factor, and that will cause the official unemployment rate to increase to 9.1% for May.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for April 1st, 2011

March 31, 2011 by · Leave a Comment 

Non-farms payrolls expected up 170,000; Will discouraged workers return? Unemployment rate depends on them

A meaningful correlation exists between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

Economic data in December, January and February suggested that the economic recovery was consolidating its momentum. Data have turned slightly more mixed in March, as major natural disasters in New Zealand and Japan, and war in Libya have sapped consumer confidence and caused a sharp spike in energy prices. In the meantime, US manufacturing data have showed continued growth and a healthy manufacturing environment, suggesting that employers may be hiring for those positions again.

Last month, the rising price of oil was a meaningful concern for continued growth. At that time oil traded at $105 per barrel. Since then, tensions in Libya erupted, sending that country into civil war, and effectively disabling over 1% of the worlds oil supplies. Significant concerns remain in Yemen, Syria, and other oil producing countries, and the price of oil has remained over $105 per barrel. Oil prices at this level will eventually affect hiring and employment.

Yesterday, ADP released the results of its survey of employers, stating it believed 201,000 private payroll jobs were added in March, 2011. This represented a decline in jobs growth over February’s estimate, but held the 4-month average of 200,000 jobs added that has existed since December. At that time, job markets made a significant break from their trend in 2010, where job gains averaged closer to 80,000 per month.

My models produced reliable predictions ranging from 152,000 to 161,000 jobs added in March. I felt recent data suggest these figures are too low, especially recent unemployment claims filings. Filings have been on a steady decrease since early 2010. For the third month in a row, the correlation between ADP and BLS data did not hold over the short term, although there was a marked improvement. As a result, data from that method was discarded when preparing this estimate. I have developed a prediction that tomorrow’s report will show 170,000 jobs were added to non-farms payrolls in March.

Governments are continuing to cut employment, but recent data suggests that trend is slowing gradually. Reductions in government employment will lower total job additions to 165,000 in March.

The official unemployment rate held in February, declining slightly to 8.9% from 9.0% in January. This is solely the result of the more than 1 million workers who left the labor force in 2010. I predict we will see the unemployment rate tick higher again as those discouraged workers return to the labor force, but it will not happen in March. For tomorrow, the official unemployment rate will hold at 8.9%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for March 4th, 2011

March 3, 2011 by · Leave a Comment 

Non-farms payrolls expected up 210,000; Discouraged workers expected back in significant numbers; Unemployment rate expected to increase to 9.3%

A meaningful correlation between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

Recent economic information has shown a decided trend towards continued improvement in the US economy. Recent reports on services, manufacturing, and retail sales, all point to continued strengthening. Consumer confidence reports have also shown stronger expectations. There have been a few reports of improvement in the housing sector, however, those reports have been very weak, principally reflecting a slight bounce from the abysmal lows of late 2010. Employment data has been suspect at best, reflecting continued inability of employers to increase hiring.

Significant concerns have arisen recently with regard to possible dampening of economic growth due to a sharp rise in prices for oil. These increases began in the 2nd week of February, so are unlikely to affect employment data yet, however, a continued elevated level of gasoline prices could affect hiring and the willingness of applicants to accept employment farther from their homes.

Yesterday, ADP reported the results of its survey of employers, stating that its data suggested 217,000 private payroll jobs had been added in February, 2011. This is a greater than 10% increase in net jobs added over the 189,000 ADP believed were gained in January. It is believed that job gains in January were tempered by severe weather in that month.

My models produced reliable predictions ranging from 195,000 to 200,000 jobs added based on the historical ADP and BLS data. For the second month, the ADP and BLS data failed to correlate in the short-term 10-period analysis; in fact the correlation became even weaker. As a result, data from that method was discarded in preparation of this estimate. Over the longer 5-year period, though, there continues to exist a strong correlation between the two data sets. I have developed a prediction that tomorrow’s report will show 210,000 private payroll jobs added in February.

As was seen in Providence today, governments continue to cut employment. Reductions in government employment will cause net job gains to be reduced to 200,000 positions. In addition to these gains, there will also be a revision to prior results which should add a substantial number of jobs, likely 80,000 added to January and December results.

The official unemployment rate fell sharply in January, declining from 9.4% to 9.0%. This was primarily precipitated by an exodus of workers, but also by a substantial increase in households reporting working status. I believe that this may have been caused by temporary fluctuations in survey results. It is likely that this may have reverted in February, which should result in a rise in the unemployment rate, likely to 9.2%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for February 4th, 2011

February 3, 2011 by · Leave a Comment 

Non-farm payrolls expected up 160,000; Discouraged workers expected to return to labor force; Unemployment rate expected to increase to 9.7%

A meaningful correlation between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. I have used data from the past 5 years reports to develop a prediction for tomorrow’s Employment Situation Report.

Recent economic information has shown a decided trend towards continued improvement in the US economy. Recent reports on services, manufacturing, and retail sales, all point to continued strengthening. There have been a few reports of improvement in the housing sector, however, those reports have been very weak, principally reflecting a slight bounce from the abysmal lows of late 2010. Employment data has been suspect at best, reflecting continued inability of employers to increase hiring.

January’s employment report significantly missed expectations, showing addition of 103,000 new payroll jobs. Most economists had predicted much larger gains, ranging from 150,000-200,000 new jobs. I predicted 255,000 jobs would be added, a substantial miss.

Yesterday, ADP reported an estimate that 187,000 jobs had been added to the economy, further building on the employment momentum built up in December. Still this is a significant decline from the now-revised 247,000 jobs ADP estimated were added in that month. Several factors may be affecting this, including recent weather patterns.

My models produced reliable predictions ranging from 165,000 to 170,000 jobs added based on the historical ADP and BLS data. This range was tightened because the recent misses in the ADP report caused the 10-period model I have used to lose statistical significance. As a result, data from those methods was discarded in preparation of this estimate. I have developed a prediction that tomorrow’s report will show 160,000 jobs added to private payrolls in January. The net jobs gain is expected to be 150,000, reflecting continued decreases in government payrolls. In addition to these gains, the BLS will provide a revision to the December employment report. I believe these revisions will add few net jobs over the months revised.

While the unemployment rate fell in December, its fall was principally driven by the exit of over 500,000 job seekers from the labor force. I believe a substantial number of these workers will return to their search, thus increasing the unemployment rate to 9.7%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Employment Situation Prediction for January 7th, 2011

January 7, 2011 by · 1 Comment 

Statistics have shown there to be a meaningful relationship between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. Using data from the past 5 years, influenced by recent economic data, a prediction for tomorrow’s report has been developed.

Recently,economic information has shown a substantial trend towards improvement. Retail sales, business climate, manufacturing climate and factory orders have all shown some improvement in December. The only components of the economy that haven’t turned better lately appear to be housing and employment, two categories that are tied closely to each other. Home prices won’t rebound until employment levels improve, meaning that improvements in the employment situation must come first.

December’s employment report was a substantial disappointment. Most economists had expected 140-150,000 jobs be added. Here, I predicted 210,000 jobs would be added. Actual results showed a gain of only 39,000 jobs.

Yesterday’s ADP Private Payrolls report gave a strong indication that December’s jobs report may have been an anomaly. According to the release, 297,000 jobs were added in December. This provides a clear signal that the employment situation is likely improving. Based on this result, and on the recent relationship between the ADP results and the BLS reports, I have prepared a prediction for tomorrow’s report.

My models produced predictions ranging from 256,000 to 486,000 jobs added. Based on available data, I have developed a prediction that tomorrow’s report will show 255,000 private payroll jobs were added in December. The net jobs gain will likely be 250,000, reflecting continuing declines in government employment. In addition to these gains in December, the Bureau of Labor Statistics will also provide a revision to November’s employment figures in the morning. I expect this revision to add 75,000 positions to payrolls.

While the unemployment rate rose in December, the jobs gains my models suggest will be high enough to lower the unemployment rate to 9.6%.

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

Mortgage Rates Rocket Higher on Inflation, Fed

December 15, 2010 by · 1 Comment 

Fed reaffirms Quantitative Easing; Inflation sharply higher on PPI, muted on CPI; Manufacturing and industrial activity surveys are strong

Fixed income markets were a train wreck yesterday as inflation numbers came in high, and retail sales strong. The Fed didn’t do anything to help, reaffirming its take that the economy isn’t growing quickly enough, and that it would continue its asset purchase plans. This comes down to the Fed’s dual mandate: low unemployment and controlled inflation. Right now, the Fed sees inflation as under control and below its target level at the moment, and sees unemployment as the bigger problem.

This morning’s inflation stats reinforced the Fed’s position. CPI came in at +.1% for both core and overall today, meaning that prices aren’t rising, according to CPI. According to this expert video,

The food prices are higher than a year ago,

The gas prices are higher than a year ago,

The health care costs are higher than a year ago,

The tuition prices are higher than a year ago,

The taxes are higher than a year ago,

The subway fares are higher than a year ago,

The stock prices are higher than a year ago,

And the bond prices are higher than a year ago.*

*(Bond prices have clearly decreased since the publication of the video.)

However, we do not see that in the CPI right now. Yesterday’s PPI did show some aspects, but CPI today does not. Big drags on the CPI this year have been apparel (-0.8%), household gas (-4.8%), new vehicles (-.4%), and shelter (aka rent, +0.2%). Note that the Bureau of Labor statistics continues to use rent in calculating shelter costs. If it used ownership costs, inflation would have measured much higher in 2003-2007, and deflation would have a firm grip on the economy right now.

The good news is that the low inflation figures this AM took some pressure off bond prices, at least for the moment. The Empire Fed index came out a little while ago, showing a positive environment for manufacturing and putting that pressure right back on. Industrial production also rose. I predicted for my ECON 101 class 3.5% GDP growth in 2010Q4 (due Jan 28 2011) based on all the positive data we’ve seen lately. I stand by that number again on this data.

All lock periods: LOCK.

Bottom line: If things look bad for rates now, they’re probably just going to get worse. Don’t go banging your head against the wall, though. The health care is too expensive.

If you have questions regarding Rhode Island Refinance Rates, or whether or not to lock your loan, please don’t hesitate to contact me by cell at (401) 263-8655. Have a great week!

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Last Week’s Report

Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates, and serves as an Adjunct Professor of Finance and Economics at Roger Williams University and the University of New Haven. He has been helping homeowners and homebuyers with their mortgage questions for over 10 years.

Employment Situation Prediction for Friday, December 3rd

December 2, 2010 by · 3 Comments 

Last month, it was asserted here there should be a statistically significant relationship between the results of the ADP Private Payrolls Report and the Total Non-farms Payrolls in the Bureau of Labor Statistics Employment Situation Report. It was established then that there is a strong correlation between the two data sets.

At that time, the data were used as part of a system to predict the results of the upcoming Employment Situation report. Additions of 73,000 private payroll jobs, and 60,000 total jobs were predicted. The actual results of the employment situation report showed 159,000 private payroll jobs added, and 151,000 total jobs, meaning the prediction fell short by 86,000 and 91,000 jobs respectively.

Since the beginning of November, there has been a significant shift in the tone of economic data. While recent inflation figures have shown limited increase in the price level, expectations of future inflation have risen significantly. Meanwhile, manufacturing and business data has shown strength, and jobless claims have fallen. The only aspect of the economy not showing strong signs of growth is housing.

In spite of this recent information, many economists were surprised yesterday when payroll services firm ADP reported 93,000 jobs were added by private firms, and that an additional 39,000 jobs had been added in the prior month.

Using the same methodology as last month, a prediction for tomorrow’s Employment Situation Report has been prepared. Recent trends in the ADP report, and recent economic data, suggest that Private Employers added 225,000 net jobs in November. Total job creation is expected to be 210,000 jobs, as governments continue to cut employment. The unemployment rate is expected to hold stable at 9.6%, but may come under pressure in the near future as discouraged workers begin returning to the labor force.

Dan Hartman is a Senior Mortgae Advisor with Provice Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.

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