Mortgage Rates Spike on Hot Jobs Report
Against a consensus forecast of 190K, the economy added 271K jobs in October, the strongest reading of the year. Upward revisions to prior months added another 12K. The average job gains over the past three months were 187K. The Unemployment Rate unexpectedly declined from 5.1% to 5.0%, the lowest level since April 2008. This report revealed strength in nearly every area. Mortgage rates were ended the week higher as a result.
Many top Fed officials made speeches over the last few days, and they shared a similar message. As the Fed’s Lockhart put it, a rate hike is possible at the next meeting on December 16, but that it is not a “certainty.” The bond market saw yields sky rocket immediately following the job report release, signaling investor’s heightened expectations of a December Fed rate hike.
Week Ahead
Factors: Retail Sales, will be released on Friday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report will be released on Thursday. JOLTS measures job openings and labor turnover rates, and this report is closely watched by Fed officials.
Volatility: Moderate
Trend: Higher
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