U.S. economic growth tapered off in the first-quarter as business cut back on spending and inventory building. Strong demand for automobiles during the quarter prevented the slowdown from becoming more pronounced. Gross Domestic Product (an estimate of the value of all the finished goods and services produced within the country’s borders over the course of period of time) expanded at a 2.2% annualized rate – noticeably throttling back from the fourth-quarter pace of 3.0%. This “guesstimate” of the economic health of the nation from the Commerce Department will not likely change the Federal Open Market Committee’s position that further financial stimulus is currently not under consideration. This report is generally supportive of the prospects for steady to perhaps fractionally lower mortgage interest rates.

In a separate report, the Labor Department revealed businesses have been able to ramp up hiring without significant corresponding gains in payrolls. The department’s quarterly employment cost index rose 0.4% during the first three-months of 2012, following a revised gain of 0.5% in the prior quarter. The very modest gain in this economic metric strongly suggest wage pressures are unlikely to stoke inflation anytime soon – a positive for the prospects of at least steady if not fractionally lower mortgage interest rates.

Looking ahead to the coming week everything from Monday’s Personal Income and Spending report to Tuesday’s Institute of Supply Management’s Manufacturing index to Thursday’s initial weekly jobless claims report will likely amount to nothing more than a warm-up act for Friday’s much anticipated April Nonfarm Payroll report.

Market participants are currently anticipating the economy created 175,000 net new jobs in April – a nice improvement from the 120,000 gain registered in March – but still well below the 250,000+ pace necessary to just keep up with the number of new entrants into the workforce. If the actual number matches or closely approximates the consensus estimate mortgage interest rates will likely remain fairly steady at current levels. In the off-chance the actual headline number exceeds 200,000 — look for surprised mortgage investors to react by pushing rates aggressively higher.

Mortgage Rates as of Friday April 27, 2012 ( purchase transactions )

30 day rate locks, subject to credit score and loan to value edits

FHA

30 year fixed 3.75% 0% origination fee

Conventional

30 year fixed rate 3.75% ( 30 day lock )

15 year fixed rate 3.125%

5/1 ARM 2.875%

7/1 ARM 3.25%