Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Negative

Employment Situation

This morning’s big economic news came from October’s Employment report that showed 165,000 new jobs were added to the economy last month to greatly exceed forecasts of 63,000. September’s payroll number was also revised higher by 31,000 to indicate the employment sector was stronger over the past two months than previously thought. This is bad news for the bond market and mortgage rates, but today’s somewhat muted reaction to the report is likely because the report may allow the Fed to raise short-term rates soon to help bring inflation down. A strong employment sector is less of a concern to the bond market than elevated inflation.

High

Unknown

Employment Situation

The other two primary headline figures in the report were also unfavorable for bonds and mortgage rates. The unemployment rate slipped from September’s 4.2% to 4.1% last month. Furthermore, average earnings rose 0.4% for the month when they were predicted to be up 0.3%. This raises wage-inflation concerns that the bond market is traditionally sensitive about, especially since the year-over-year rate rose from 3.0% to 3.1% when it was expected to dip slightly. Still, considering what the data shows, the bond market is doing pretty well this morning. This data could have easily caused a major sell-off in bonds.

Medium

Negative

Univ of Mich Consumer Sentiment (Prelim)

Also posted this morning was November's preliminary reading of the University of Michigan's Index of Consumer Sentiment. It was announced at 51.0, up from October’s 48.0 and much higher than the 47.2 that was expected. The increase from last month is a sign consumers are feeling better about their own financial situations this month. Since rising confidence usually translates into stronger consumer spending that makes up over two-thirds of the U.S. economy, we have to label the report bad news for rates.

High

Unknown

Consumer Price Index (CPI)

Next week is a little shorter than usual for the bond market due to the Veteran’s Day holiday midweek. The week’s calendar includes two highly important inflation readings in addition to a few moderately influential releases. There is also a large number of Fed-member speeches with three scheduled throughout the day Tuesday that all have a topic listed that is related to the economy and its outlook. Monday doesn’t have anything relevant scheduled other than a couple of Fed speeches, meaning we can expect weekend geopolitical headlines to be behind a noticeable change in rates that day. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Employment Situation

Employment Situation

Univ of Mich Consumer Sentiment (Prelim)

Consumer Price Index (CPI)

Float / Lock Recommendation