Glad tidings about the economy are often bad news for mortgage shoppers, and that's the case today.
Today's April employment report was unexpectedly rosy, and mortgage rates went up in response. Rates will probably jump an eighth of a percentage point today, tweets Dan Green, a loan officer who goes by the handle @mortgagereports.
Some details about the employment report
The headline numbers for April:
- The unemployment rate dropped from 7.6 percent to 7.5 percent.
- Net jobs increased by 165,000.
The small print contains mostly good news, mixed with an ominous note.
- Job growth in February was revised upward by 64,000, to 332,000 net jobs.
- Job growth in March was revised upward by 50,000, to 138,000.
- Over the last 12 months, the average hourly earnings have risen 1.9 percent, or 45 cents.
- In April, the average workweek in the private sector decreased by 12 minutes, to 34 hours, 24 minutes.
That last item worries me. When the average workweek shrinks, that doesn't seem like a promising sign for future hiring.
What it means for mortgage rates
When you add it up:
- The unemployment rate is falling.
- February and March job numbers were revised upward by a total of 114,000.
- April job growth was 165,000.
- Wage increases almost, but not quite, reached the Fed's inflation target.
You end up with a fairly positive picture of an economy that continues to grow stubbornly, despite Congress's diligent efforts to smother it with job cuts, furloughs, tax increases and general fecklessness. And economic growth brings higher interest rates on mortgages.
Follow me on Twitter @HoldenL.