The story behind the story on mortgage rates.

The story behind the story on mortgage rates.  

January 13, 2025 

It was another tough week for mortgage rates last week, with the big miss being the BLS Jobs Report with close to 100,000 more jobs than expected.

 

• JOLTS: 8.098mil vs 7.7mil expected. The internal data indicated more weakness than the headlines, but the bond markets responded negatively (bad for rates).
• ISM Services: 54.1 vs 53.3 expected
• Prices paid (measure of inflation) 64.4 vs 57.5 expected / 58.2 previous. This large increase caught some attention.
• ADP (private sector jobs): 122,000 vs 146,000 expected. Nearly all these jobs are in the services sector (112,000), for large businesses.
• The wage components indicate more slowing, which is good for inflation.
• Jobless claims
• Initial: 201,000 vs 211,000 previous (10,000 decrease)
• Continuing: 1.867mil vs 1.834mil previous (33,000 increase)
• BLS Jobs: 256,000 vs 160,000 expected with unemployment 4.1% vs 4.2% expected. Double ouchy.
• Previous months revisions were to the downside, but small for each month (8,000 total).
• Seasonal adjustments seem a little whacky with a negative 81,000 jobs on the non-seasonal adjusted numbers.
• The wage component showed more weakness than the headline numbers.

 

Fed member Waller is confident that inflation is moving in the right direct despite recent hotter than expected data. Additionally, chief economist Nela Richardson expressed concern about the labor market and predicts greater struggles in 2025, despite stronger than expected data.