Holy Hell That Was A Bad Jobs Report. But Rates Are Even Lower.

Rates are holding record lows this morning and may drop lower after another dismal BLS report showed the U.S. economy added 69k non-farm payrolls in May. This is the third straight monthly jobs flop. April was cut from 115k to 77k, and March was cut from 154k to 143k.

This non-farm payrolls figure doesn’t count actual people, it counts how many companies opened or closed, then uses that data to estimate the number of jobs gained or lost.

Unemployment rose from 8.1% to 8.2% according to a different part of the jobs report called the ‘Household Survey’ which counts people—12.7 million are unemployed and another 8.1m are working part time because they had hours cut or can’t find full time work.

RATE REACTION
Rates drop when mortgage bonds (MBS) rally, and MBS continue their stunning rally this morning that’s been driven by weak U.S. and Eurozone data and sentiment.

The 3.5% Fannie Mae coupon—a key benchmark lenders use to price consumer rates—is up another 39 basis points this morning, and if the rally holds and lenders pass this along to consumer pricing, we could see rates drop another .125% from already-record-low levels. Here’s a chart (used with permission from MBSLive).

My colleague Dick Lepre made a bold call on rates going this low and he’s proven right today.

Stay tuned: Twitter | Stocktwits | Facebook
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Reference:
-BLS May Jobs Report

$TLT $MBB $ZN_F $ZB_F

  • http://www.manhattansgreatest.blogspot.com/ Dennis The Menace

    Their was a study that came out a couple of months ago that found that 42% of all the new jobs being created were low wage thats 42% so if we were to extrapolate that figure into a stat it might look something like this 42% of the jobs being created should be counted as half jobs 2 = 1 mid wage or 1  high wage job because it takes two or more low wage jobs to equal the  buying power  of  1 mid wage or 1 high wage job.

  • http://www.sailmortgage.com/pittsburgh-mortgage-terms-ascl/ David J.

    Well, it’s good to see that at least manufacturing is up!  Maybe we’ll finally return to having an economy that actually produces things.  Hopefully that “government” number continues to decline too – enough bleeding the economy to fund non-productive “jobs.”

 
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