Mortgage Rates Respond to Jobs Report

Today was the day everyone was waiting for – and it came in like a THUD.  Mortgage rates are moving sideways once again today.  Here are the key points that the news outlets are reporting on a continuous loop: Unemployment Rate 4.9%. This is unchanged from July.  The market was expecting 4.8%. August Non-Farm Payrolls 151K, the market was expecting 180K. Average Hourly Wages increased by 0.1%, the market was expecting 0.2%. The Participation Rate remained at 62.8% Average Weekly Hours fell from 34.4 to 34.3.

Now here is the big question - How are mortgage rates are viewing this?  While no one can deny that this report is lighter than expected, but it actually is not a bad report. What I mean by that is that a couple of very important trends are still very much intact. The Non-Farm Payroll number from July was revised upward from 255K to 275K. That brings the more closely watched 3 month moving average to 232K which is very strong indeed. Average Hourly Wages did make yet another monthly gain, this time by 0.1% to $25.73. Year-over-year, it is still comfortably above 2.0% with a 2.4% reading.

We did get another report from Manufacturing as Factory Orders in July just missed the mark but it was still a nice turnaround from June's disappointing number.

Going into the long weekend I expect mortgage rates to stay flat and volatility to remain fairly low.

Have a Fantastic Labor Day!