Like the life of a male praying mantis, this week's economic calendar is brief and uneventful until it ends with a bang. Friday morning brings us the May employment report. It's the week's most important report when it comes to mortgage rates.
According to Briefing.com, the consensus is that the report will say that nonfarm payrolls grew by 500,000 in May, and the unemployment rate will remain about the same (9.9 percent, give or take a tenth of a percentage point).
If the employment report is significantly worse than expected, mortgage rates might go lower. If the employment report is a lot better than expected, mortgage rates almost surely will go up as investors sell bonds and buy stocks. My definition of "significantly worse" is nonfarm payroll growth of 200,000 or less, or an unemployment rate higher than 10.1 percent. "A lot better" would be job growth of 750,000 or more.
I wonder if the Labor Department will include a note about employment in the Gulf of Mexico. Has the oil spill resulted in a net loss of jobs and work hours? Or has the cleanup effort had the opposite effect?