When looking back on the week that was, it seems like mortgage rates went on a wild ride. Lenders repriced for the better and lenders repriced for the worse, sometimes they did both on the same day. Yet, ahead of the most influential economic report released by the government, rates managed to find their way back to where they started the week: NEAR 2010 MORTGAGE RATE LOWS. At least until 8:30am this morning.
At 8:30 am eastern time, the Bureau of Labor Statistics released the monthly Employment Situation report. As stated already, this is the single most important piece of monthly economic data released to the market. Since consumer spending accounts for the vast majority of our economic growth, market participants track jobs as a way to gauge consumer demand and economic activity. If the number of unemployed Americans is moving higher, more people are without a job and therefore without stable income. This drains consumer demand and forces companies to keep costs low to stay in line with falling revenues. High unemployment is bad for stocks. Generally what is bad for stocks is good for bonds and mortgage rates.
This report gives us four different readings:
- Nonfarm Payrolls - totals the number of jobs lost or created in the prior month. Consensus Forecast: 50,000 jobs lost
- Unemployment Rate – the percentage of able Americans who are out of work. Consensus Forecast: 9.8%
- Average Hourly Earnings – shows the monthly change in the hourly wages. Consensus Forecast: +0.2%
- Average Work Week – shows the average amount of hours worked weekly. Consensus Forecast: 33.7 hours
