📊 Job Numbers and Bond Sacrifices

Hey there, Realtors! ⭐

Data-Dependent Dynamics 📊

Ever heard of being "data-dependent"? It's not just a buzzword in financial circles; it's a guiding principle for many, including the Federal Reserve. Essentially, it means that economic data shapes decisions on interest rates.

Navigating Uncertainty 👀

But let's talk about the past week's uncertainty. In recent years, the economic outlook has been a bit like a seesaw. We've waited anxiously for signs of inflation and job growth to either skyrocket or plummet. And in this dance, some reports stand out more than others – like last Friday's jobs report.

Impressive Numbers 📈

When job growth exceeded expectations, it usually spelled a bump in rates. And last week's report? Well, it was a doozy. The actual job count surpassed forecasts by a significant margin – 303k versus a predicted 200k. That was quite the beat!

Market Reaction 📉

Naturally, we saw rates tick upward as bonds faltered. However, the rate hike wasn't as substantial as one might expect. That was intriguing, right? But maybe not entirely unexpected. You see, while last week's jobs report was critical, next week's Consumer Price Index (CPI) holds even more weight. The market might have been holding its breath until then.

What's Next? 💡

So, while last week's resilience was noteworthy, the real show might be this week. Keep your eyes peeled!

In-Depth Analysis 📊

And let's not forget the nitty-gritty details from last Friday: The jobs number came in at 303k versus a median forecast of 200k. Previous month revisions added a minimal 22k to the 3-month total, and unemployment ticked down to 3.8% from 3.9% the previous month. Numbers like this demanded a sacrifice from the bond market, and the bond market quickly acquiesced. That said, if we were forced to guess at the size of the sacrifice, it would probably have been bigger than the one we actually saw last Friday. In fact, bonds were almost back to pre-NFP levels by 10:30 am, and MBS consistently traded a bit higher than yesterday's opening levels. Bottom line: yes, we were weaker, but it could have been a lot worse.

Catch you next time,