Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Neutral

Employment Situation

The first of this morning’s highly important economic releases was November’s Employment report that also included some of October’s data. It revealed the unemployment rate rose to 4.6% last month, matching its highest point since September 2021. The economy added 64,000 new jobs last month when analysts were expecting to see between 40,000 and 50,000 payrolls. While we won’t get October’s unemployment rate, we did get the payroll number, which showed 105,000 jobs were lost during the month. This was attributed to a significant number of government workers that took the early buyout offers and not an accurate reflection of the overall labor market.

High

Positive

Employment Situation

This morning’s report also gave us some earnings figures that bonds are usually very sensitive to. November’s average earnings rose just 0.1%, falling short of the 0.3% that was expected. However, October’s earnings rose a more than predicted rate of 0.4%. Both months had a decline in the year-over-year earnings, as they were expected to do. These earnings readings should ease some inflation concerns because rising wages cause businesses to raise the cost of their products and services.

High

Neutral

Employment Situation

In short, today’s employment data gave us a mixed bag of results. The higher unemployment rate is good news for bonds and mortgage rates as is the softer earnings number for November. Last month’s payroll number was higher than expected, meaning it is bad news for rates. That said, the government shutdown undermines the reliability of the data and the variances from forecasts were not significant enough to offset those concerns. Accordingly, we are seeing a somewhat limited response to the report.

High

Negative

Retail Sales

Today’s second release also gave us conflicting economic signs. October’s Retail Sales report revealed consumer spending was unchanged from September’s level. This was good news because analysts had predicted a 0.2% increase in sales at retail-level establishments. The bad news came in a secondary reading that excludes more costly and volatile auto transactions. This reading rose 0.4% to exceed forecasts of up 0.1%. Consumer spending is watched closely since that category makes up over two-thirds of the U.S. economy. Today’s report has to be labeled slightly negative for bonds and mortgage rates. Fortunately, the more recent employment data is having a stronger impact on today’s trading than this data from October.

Medium

Unknown

Fed Talk

Tomorrow doesn’t show any relevant economic data set for release. However, there are a few Fed-member speaking engagements scheduled in the morning. One of them is by Fed Governor Christopher Waller at a Yale University business summit. The topic of the 8:15 AM ET discussion is listed as Economic Outlook, meaning we could hear something that draws a reaction from the bond market. His words could move bonds enough to cause a change in mortgage rates, especially since there is nothing else scheduled during morning trading.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

There also is 20-year Treasury Bond auction happening tomorrow that may come into play during afternoon trading. If the 1:00 PM ET auction results announcement indicates there was a strong demand for the securities, we could see bond strength afterward that causes a slight improvement in rates before the end of the day. On the other hand, a lackluster interest from investors may lead to bond weakness and an upward revision to rates.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Employment Situation

Employment Situation

Employment Situation

Retail Sales

Fed Talk

Treasury Auctions (5,7,10,20,30 year)

Float / Lock Recommendation