Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

Fed Beige Book

Yesterday afternoon’s release of the Fed Beige Book didn’t reveal any major surprises. However, what it did say was mostly good news for bonds and mortgage rates. This report details economic conditions throughout the U.S. via business contacts in each Federal Reserve region. The consensus is overall economic activity slowed over the previous six weeks with prices (inflation) rising moderately due to fears related to tariffs. There were also some signs of weakness brewing in the employment sector with hiring pauses and staff reductions rising. In short, inflation is never good news for bonds, but slower economic activity, employment weakness and fears about the future make bonds more appealing to investors. We started to see improvements to mortgage rates before the report was posted, followed by widespread revisions shortly after.

Medium

Positive

Weekly Unemployment Claims (every Thursday)

The first of this morning’s two moderately important economic releases was last week’s unemployment update at 8:30 AM ET that showed new claims for jobless benefits jumped to 247,000. This was an increase from the previous week’s revised 239,000 initial filings and higher than forecasts of 236,000. Since rising claims are a sign of weakness in the employment sector, last week’s number is good news for mortgage rates.

Medium

Negative

Productivity and Costs (Quarterly)

Also posted this morning was last quarter’s revised Productivity and Costs data. It gave us unfavorable revisions to both worker output (productivity) and labor costs. Productivity was revised from down 0.8% to down 1.5%, while the Labor Costs reading was changed from up 5.7% to up 6.6%.

High

Unknown

Employment Situation

Tomorrow morning brings us the release of the almighty monthly governmental Employment report at 8:30 AM ET. This extremely important data will give us key employment readings such as the U.S. unemployment rate, the number of jobs added or lost during the month and average earnings change. Analysts are expecting to see the unemployment rate hold at April's 4.2% for May with approximately 130,000 jobs added during the month and a 0.3% increase in earnings. Good news for mortgage rates would be a much smaller increase in payrolls and an increase in unemployment. Bonds are particularly sensitive to earnings numbers, so a smaller increase should help contribute to lower mortgage rates tomorrow.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Beige Book

Weekly Unemployment Claims (every Thursday)

Productivity and Costs (Quarterly)

Employment Situation

Float / Lock Recommendation