Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Negative

Fed Beige Book

Yesterday afternoon’s release of the Fed Beige Book certainly didn’t contain anything that we can label as good news for the bond market or mortgage rates. The overwhelming message was that higher prices and inflation concerns are causing alarm for both businesses and consumers. Direct impacts of the Iran war are causing both to alter spending plans. It did indicate that the strain is much more apparent in the budgets of the middle and lower classes and not so much for the wealthy. Rising costs and broad inflation in the economy makes bonds less appealing to investors and becomes troublesome for mortgage rates. Fortunately, we didn’t see much of a reaction to the 2:00 PM ET release yesterday since what it showed came as no surprise. That said, the report has to be considered unfavorable for bonds and mortgage pricing.

Medium

Positive

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures that were posted early this morning revealed 225,000 new claims for jobless benefits were made. This was noticeably higher than the 213,000 initial filings that were expected and an increase from the previous week’s revised 212,000 new claims. Rising claims are a sign of a weakening employment sector. Therefore, this weekly update is good news for mortgage rates.

Low

Neutral

Productivity and Costs (Quarterly)

Revised 1st Quarter Productivity and Costs data were also posted early this morning. They showed worker output was softer than previously thought at up 0.3% compared to the 0.8% that was expected. Weaker productivity numbers are negative for bonds and mortgage rates because strong output per hour worked allows for non-inflationary economic growth. However, a secondary reading related to labor costs and wage inflation was also revised lower. This portion of the report is good news for rates.

High

Unknown

Employment Situation

This week's economic calendar will come to an end at 8:30 AM tomorrow morning when May's governmental Employment report is posted. 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 4.3% for May with approximately 85,000 jobs added during the month and a 0.3% increase in earnings. A higher than expected unemployment rate and a much smaller increase in payrolls would be favorable news for mortgage rates. Bonds are particularly sensitive to the earnings increase also, meaning the smaller the rise in that number, the better the news for rates.

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