Mortgage Rates Remain Steady
While last week was a big week for economic news, the major reports did not cause much reaction. As a result, mortgage rates ended with little change.
Job Market Rebounds Stronger Than Expected
Disrupted by hurricanes and large strikes in October, the key Employment report revealed that the labor market bounced back a little more strongly than expected. After rising by a slim 36,000 jobs in October, the economy added 227,000 jobs in November, above the consensus forecast of 200,000, and the results for prior months were revised higher by 56,000. Average hourly earnings, an indicator of wage growth, were 4.0% higher than a year ago, the same annual rate of increase as last month.
Rising Job Openings Could Affect the Economy
The JOLTS (job openings and labor turnover rates) report also suggested that the labor market may be tightening again. At the end of October, there were 7.7 million job openings, above the consensus forecast of 7.5 million. This increased the ratio to about 1.1 openings for each available worker, though still down from a peak of over 2.0 in early 2022, and in line with the levels seen prior to the pandemic. A larger number of openings suggests that companies face more pressure to raise wages to hire enough workers, making this negative news on inflation and thus unfavorable for mortgage rates.
ISM Data Highlights Diverging Trends
Two other significant economic reports released last week by the Institute of Supply Management revealed mixed results. The ISM national services sector index declined to 52.1, falling well short of the consensus forecast to the lowest level since February 2023. The national manufacturing index rose to 48.4, a little above expectations, but this was its eighth straight month under 50. Since readings above 50 indicate an expansion in the sector and below 50 a contraction, these reports reinforce yet again that service companies have outperformed manufacturers over the last couple of years.
Mortgage Rates for the week of 12-09-2024