Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Positive

Employment Situation

This morning’s key Employment report gave us surprisingly weak numbers, reopening the question about employment sector stability and if the Fed needs to cut rates again to support it. Today’s report revealed the unemployment rate rose 0.1% last month when it was expected to hold at January’s 4.3%. Even bigger news was the payroll number that showed the economy lost 92,000 jobs instead of adding 59,000. This was the largest monthly decline since December 2020 and the third month with job losses in the past five months. Furthermore, revisions to December and January’s payroll numbers removed 69,000 jobs from previously announced levels.

High

Negative

Employment Situation

February’s report wasn’t all good news. The average earnings data rose 0.4%, exceeding forecasts of 0.3%. On an annual basis, earnings growth moved from 3.7% to 3.8%. The stronger than expected earnings fuel inflation concerns, which is already a hot topic for the bond market due to the Iran war and rapidly rising oil prices.

High

Neutral

Retail Sales

January's Retail Sales report was also posted early this morning. It showed consumers spent a little less than they did in December. The 0.2% decline in sales was a little stronger than the 0.3% decline that was predicted, but any slowdown in consumer spending is favorable for bonds and mortgage rates because that category makes up over two-thirds of the U.S. economy. A secondary reading that excludes more costly and volatile auto transactions was unchanged, falling just short of the 0.1% increase that was expected.

High

Negative

Inflation News

Unfortunately, this morning’s data and early stock selling has not been enough to derail the negative momentum in the bond market this week. With the Iran war spreading to other countries, looking to become the regional war that so many feared, oil prices are rising each day. This not only is costing us more at the gas pump already, it is likely to fuel inflation throughout the economy. Rising inflation makes long-term debt such as mortgage bonds less attractive to investors. The result is lower prices, pushing their yields and mortgage rates higher.

High

Unknown

Consumer Price Index (CPI)

Next week has several highly influential economic reports scheduled for release, but they come Wednesday and Friday mornings. In addition to a few moderately important reports throughout the week there are also two auctions of long-term Treasury debt midweek that may have an impact on rates during afternoon trading. The week starts light with nothing of importance set for Monday. This should leave weekend news, particularly Iran-related headlines, to drive trading as the new week begins. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Employment Situation

Employment Situation

Retail Sales

Inflation News

Consumer Price Index (CPI)

Float / Lock Recommendation