Big Jobs Friday

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Published Date 1/5/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are getting some support today. The MBS market worsened by -25 bps yesterday. This may have been enough to increase mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Its Big Jobs Friday!

Jobs:

Non Farm Payroll adds (NFP) for December was hotter than expected, 216K versus estimates of 170K.

November NFP was revised lower from 199K to 173K.

October NFP was revised lower from 150K to 105K.

The rolling three month average is now 164K.

Wages:

The national average hourly earnings rate increased by a large margin, up 15 cents to $34.27.

MOM, the Average Hourly Earnings rose by 0.4% versus estimates of 0.3%.

YOY, the Average Hourly Earnings rose by 4.1% versus estimates of 3.9%.

Unemployment:

The Unemployment rate remained at 3.7%, estimates were fro 3.8%.

The U6 Underemployment Rate rose from 7.0% to 7.1%.

The Laborforce Participation Rate dropped from 62.8% to 62.5%.

Services: The December ISM Non Manufacturing PMI (services), which represents approximately 2/3 of our economic engine, continues to show expansion with a reading of 50.6 but it was much lower than the estimates of 52.6. The Employment Index showed dismal results at 43.3 versus November's pace of 50.7 and the Prices Paid remained elevated at 57.4.

Manufacturing: November Factory Orders were up 2.6% versus estimates of 2.1%.

Today's Potential Rate Volatility: High

This morning markets are getting some support on the morning data. Volatility has started high but will likely moderate later in the day.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.