Much like Fed meetings, the jobs report is just one of those days that you know will be volatile.  Of note, the jobs report always hits in the morning before rates are out from most investors.  So, unlike Fed meetings, you don’t have the option of locking that day before the release.  Rates could be radically different tomorrow morning.

Look at last month:  It was an awful report, just 36,000 new jobs were added.  However, unemployment ticked to 9.0%, the lowest level in two years.

The unexpected improvement in the unemployment rate led to concerns of inflation.  Concerns of inflation led to mortgage rates jumping 0.375%.

Tomorrow, we’re looking to see job creation of 183,000.  Anything at or above that level will send mortgage rates up and up quickly.  We would need to be significantly below that figure for it to have any influence on making mortgage rates tick lower.

If you’re shopping for a mortgage right now, weigh your risk tolerance.  Say it is equally likely that rates go up .25% or down .125%.  If you’re comfortable with 2:1 odds against you, floating is an option.  If you don’t like that risk, you can’t get today’s rates tomorrow after the report is released.

Mortgage rates could move higher beginning tomorrow morning. The Bureau of Labor Statistics releases its February jobs report at 8:30 AM ET.

Home buyers and rate shoppers would be wise to take note. The jobs report is almost always a market-mover.

Consider last month.

Although net job creation fell well-short of expectations in January — just 36,000 jobs were added — the national Unemployment Rate dropped to 9.0%, its lowest level in 2 years. The marked improvement surprised economists and sparked inflationary concerns within the investor community.

This, in turn, caused mortgage rates to rise.

In the days immediately following the jobs report’s release, conforming rates jumped 0.375 percent. That’s equivalent to a mortgage payment increase of $22 per month per $100,000 borrowed.

A similar spike could occur tomorrow.

Wall Street scrutinizes job growth because with more working Americans, there’s more consumer spending, and consumer spending accounts for 70% of the U.S. economy. A blow-out number tomorrow would change expectations for the future, and lead rates higher again.

The economy shed 7 million jobs between 2008 and 2009 and has barely made 1 million of them back. Tomorrow, analysts expect to see 183,000 jobs created. If the actual reading is lower-than-expected, mortgage rates should fall and home affordability will improve.

Anything else and mortgage rates should rise. Likely by a lot.

Therefore, if you’re shopping for a mortgage right now, consider your risk tolerance. Once markets open tomorrow, you can’t get today’s rates.

The notable figure is that the unemployment rate dipped from 9.4% to 9.0% last month.  That’s the lowest level in 2 years and the good news from the report.

The bad news is that the job creation was nowhere near forecasts.

• Estimated job growth in January : +148,000 jobs
• Actual job growth in January : +36,000 jobs

Right now, Wall Street is shrugging off the new jobs figure due to “bad weather.”  Some of that does make sense.  The entire East Coast has been pummeled time and again this winter.  Blizzards and ice storms have a tendency to muddy the hiring process.

Based on the headline data from the unemployment figure, the futures market made it look like the stock market would come out of the gate smoking today.  The Dow and S&P are down slightly today so the worst-case for mortgage rates didn’t happen.

We’ve had a really ugly week.  One of two things is happening now.  Either the bullish economic data has been priced into mortgage rates and they’re not going up significantly today OR this trend will continue and mortgage rates are going up further.

Sometimes the best way to look at mortgage rates is to look less at what is influencing them and more at what geopolitical events they are shrugging off.  Egypt is a mess.   As we’re all dusting off our Iranian revolution books from three decades ago, we remember that the visible faces on a revolution may not be the actual forces behind the revolution.  See also the pro-Western English liberals v. the Ayatollah.

So we have no idea what is really happening in Egypt.  It is the 21st largest oil-producing nation, it is a major ally in the Middle East, borders Israel, and has incited similar demonstrations in countries whose stability, if not policies, we value.  Repeating a general rule on this blog, when global events point to financial or political collapse somewhere, mortgage rates tend to go lower.

Mortgage rates are higher this week.

There are some times when you just say “if that’s not enough to make mortgage rates come down, they’re not coming down.”  This might be one of those times.

If things change, that’s a different story.  If this trend continues, mortgage rates are moving higher and we know housing has posted month-after-month of reports that point towards higher prices.  If you’re looking at buying in 2011, you might be best served to buy before the rest of the spring market hits the streets.

There are some times when you just say “if that’s not enough to make mortgage rates come down, they’re not coming down.”  This might be one of those times.

Americans are getting back to work. Sort of.

This morning, at 8:30 AM ET, the Bureau of Labor Statistics released its Non-Farm Payrolls report for January 2011. More commonly called “the jobs report”, the government’s data showed a large decrease in the number of working Americans as compared to December, but a sizable drop in the Unemployment Rate.

The job growth figures were much lower than consensus estimates:

• Expected job growth in January : +148,000 jobs
• Actual job growth in January : +36,000 jobs

January’s Unemployment Rate surprised analysts, too, but not in a bad way, falling from 9.4 percent in December to 9.0 percent last month. This is the nation’s lowest Unemployment Rate in nearly 2 years.

Today’s jobs report is rough news for home buyers and rate shoppers in Chicago. Shortly after the report’s release, Wall Street is attributing the low jobs number to “bad weather” and is choosing to focus on the strong Unemployment Rate instead.

U.S. stock futures are now rising ahead of open, an increase that will come at the expense of the bond markets. Indeed, mortgage-backed bonds are losing this morning already.

Conforming mortgage rates are expected to start the day at least +0.125% from Thursday’s close and, if momentum continues, could tack on an additional +0.125% before today’s closing bell.

The government’s report is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.

The economy shed 7 million jobs between 2008 and 2009 and fewer than 1 million of those were recovered in 2010. It’s a data point Wall Street watches closely because more working Americans means more consumer spending, and more consumer spending means more economic growth. Consumers account for 70% of the U.S. economy, after all.

More workers also means more taxes paid to federal, state and local government, and, in theory, fewer loan charge-offs from banks. These, too, keep the economic engine moving forward, spurring more spending and job growth. 

If you have not yet locked a mortgage rate, consider locking one today. On the heels of today’s jobs data, 30-year fixed rates will scratch at their highest levels of the year.

Known as “the jobs report,” this is the raw employment data and the Unemployment Rate.  It hit at 7:30 Chicago time today and is pushing mortgage rates lower.  For this today, this week, this month and all of this year, we’re going to be writing about employment data.  It drives home values, it drives mortgage rates, and it drives the economy.

We lost a whopping seven million jobs in 2008/9.  We recovered just under one million last year. Consider how job creation influences the economy:

1. More jobs means more income and more spending
2. More spending means more business growth
3. More business growth means more job creation

It’s a self-reinforcing cycle.  With each successive cycle, we typically tend to see mortgage rates move higher.

Non-farm, non-government jobs did not increase as much as the market had forecast.  That’s bad economic news, that’s good interest rate news.   Part of the disappointment stemmed from the head fake from the ADP report Wednesday which showed blowout numbers.  However, part of that was the ADP report including five weeks this time around and the number was pushed up by the quantity of temporary workers.

Unemployment Rate and Mortgage Rates

CNN watches the unemployment rate.  Wall Street watches net job creation. Resist the urge.  Normally, you can watch unemployment and get an idea of mortgage rates.  It isn’t like that this time around.

The headline data of unemployment dropping to 9.4%.  You would think that mortgage rates would rise, but they didn’t.  The reason is how unemployment is calculated.

When the Bureau does its household survey, if a respondent says that he/she is not looking for a job, that person is not considered unemployed.  Job creation directly measures the employment market while the unemployment rate can be skewed by those who have given up seeking work.

If you’re looking to dial in your mortgage rate predictions, tune your crystal ball to the jobs report, not the unemployment rate.

On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report.

More commonly called “the jobs report”, the government’s data include raw employment figures and the Unemployment Rate.

The jobs report hit the wires at 8:30 AM ET today. It’s making big waves in the mortgage market and may help home affordability for buyers in Oak Park this weekend, and would-be refinancers across Illinois.

For this month, and for the rest of 2011, employment data will figure big in mortgage markets.

7 million jobs were lost in 2008 and 2009. Fewer than one million jobs were recovered in 2010. For the economy to fully recover, analysts believe that jobs growth is paramount.

Consider how job creation influences the economy:

1. More jobs means more income and more spending
2. More spending means more business growth
3. More business growth means more job creation

It’s a self-reinforcing cycle and, as business grows, the economy expands, pushing stock markets higher. This tends to lead mortgage rates higher, too, because bonds can lose their appeal when stock markets gain.

According to the government, 103,000 jobs were created in December, and October’s and November’s figures were revised higher by a net 50,000 jobs for a total of 153,000 new jobs created. Economists expected a net gain of 135,000.

The Unemployment rate fell to 9.4, its lowest level since mid-2009.

Wall Street is voting with its dollars right now. Mortgage bonds are improving, pointing to slightly lower mortgage rates today.

The December jobs report was “average”, and home affordability is improving.

The Bureau of Labor Statistics releases the November jobs report Friday morning.  If results beat expectations, mortgage rates will likely rise again and that’s looking more than possible.  Here’s why:

Our friends over at payroll processing giant ADP said on Wednesday that 98,000 private-sector jobs were created in November.  That crushes expectations of around 50,000 jobs created.   Further, ADP revised the October results, showing gains of 84,000 instead of the previously reported 43,000.

Jobs = consumer spending, consumer spending = recovery, recovery = higher mortgage rates.

In response to ADP’s release, the market had it’s 3rd worst day of the year yesterday, sending some rates up as much as .0375%. 

We’ve been talking about the spark that would ignite the whole powder keg, yesterday’s ADP report definitely lit up at least some of it.  Some banks changed rates as many as four times yesterday. 

Tomorrow, the forecast is for a report of 146,000 jobs created in November.  Mortgage rates and the related home affordability metrics are highly tied to tomorrow’s results.  A lower number, rates might dip a bit.  Above that 146k forecast, rates could jump significantly. 

For existing home owners, this is good news as an economic recovery directly influences your home value. 

For would-be home buyers, don’t do what everyone else does.  While that’s rarely a good idea, it’s never a good idea when it comes to buying a home.  Many real estate agents talk about the spring market, but the good ones are already out negotiating at today’s still-low home prices using today’s still-low mortgage rates.  Spring?  That might be a different story.

Mortgage rates are rising, up nearly 1 percent since mid-October. Tomorrow, rates could rise again.

The Bureau of Labor Statistics releases the November jobs report at 8:30 A.M. ET Friday. With a stronger-than-expected reading, mortgage rates should continue their climb, harming home affordability across Illinois and nationwide.

And already, Wall Street is bracing for big results.  Here’s why.

Wednesday, payroll processor ADP said that 98,000 private-sector jobs were created in November. The figure was a complete blowout reading as compared to analyst estimates, which had the results in the 50,000 range. But that wasn’t all. ADP re-measured and re-reported October’s gains, too. It found that 84,000 jobs were created — not the 43,000 on its original report from 30 days ago.

If jobs growth is the keystone to economic recovery, the ADP report suggests that recovery is already underway.

It’s bad news for rate shoppers. A faltering economy helped keep mortgage rates low. A recovering one should make rates rise. And, that’s exactly what happened Wednesday.

In response to the ADP report, conforming mortgage rates posted their third-worst day of the year. Rates climbed as much as 0.375 percent throughout the day as lenders scrambled to keep up with a deteriorating market.

At some banks, rates changed 4 times between the market’s open and close.

Tomorrow, analysts expect the government to report 146,000 jobs created in November. Mortgage markets and home affordability have a lot riding on the actual results. A lower-than-expected reading should lead mortgage rates lower. Anything else and mortgage rates should rise. Likely by a lot.

Therefore, if you’re shopping for a mortgage right now, or floating a loan that’s in-process, think about your personal risk tolerance and whether you want to gamble against rates moving higher. Once Friday morning’s report is released, it may be too late to lock something lower.

Mortgage rates have been falling since April, shedding more than 1 percentage point since the Refi Boom began. Today, that momentum could lose some steam.

The Bureau of Labor Statistics releases the October jobs report at 8:30 A.M. ET. With a stronger-than-expected reading, mortgage rates should rise, harming home affordability in Illinois and nationwide.

As cited by the Fed earlier this week, jobs are a key part of economic growth and growth affects mortgage rates.

Looking back at jobs, starting in January 2010, after close to 24 consecutive months of job loss, the economy added jobs for the first time since 2007. It started a small jobs winning streak. By May — boosted by the temporary census workers — monthly job growth reached as far north as 431,000 jobs.

That figure then slipped negative in June and has yet to turn-around.

This month, economists expect 61,000 jobs lost and 9.6% Unemployment Rate.

Jobs matter to the U.S. economy. Among other reasons, employed Americans spend more on everyday goods and services, and are less likely to stop payments on a mortgage. These effects spur the economy, stem foreclosures, and promote higher home values.

The reverse is also true. Fewer workers means fewer disposable dollars and, in theory, a slowing economy. Weak jobs data should spur a stock market sell-off which should, in turn, help lead to mortgage rates lower.

Strong jobs data, on the other hand, should cause mortgage rates to rise.

The stronger October’s employment figures, the higher mortgage rates should go.

Mortgage rates have been jumpy this week because of the Federal Reserve and its new support for bond markets. Today’s employment report should add to the volatility.

This is commonly referred to as the “the jobs report” and the data strongly influences stocks and bonds and therefore is highly influential with home affordability figures.  Especially in today’s economic climate and we saw mortgage rates dip lower on Friday.

While economists remain uncertain over the direction of the overall economy, labor stats strongly influence these cycles.   It is the age-old cycle of recovery.

1. Job creation creates income
2. Income creates spending
3. Spending creates more growth in business
4. Growth in business creates more job creation

These numbers were not good for September. Forecasts were for 5,000 jobs lost, the market posting 95,000.  Beyond the headline data, if you exclude public sector layoffs, the private sector expanded by 64,000.   This trailed expectations and therefore wasn’t enough to offset the surprise job loss pushing mortgage rates even lower.

Mortgage backed securities are taking the day off to celebrate Columbus Day.  Trading resumes tomorrow.