The U.S. job market wasn't as strong as expected in July, shows the monthly employment report released this morning. For mortgage borrowers, this could be good news.
U.S. employers added 162,000 jobs in July, the Labor Department says. That's less than the 185,000 jobs economists had expected. The numbers for May and June were revised downward to show a total of 26,000 fewer jobs than originally estimated. The economy added 176,000 jobs in May and 188,000 in June.
A lower unemployment rate, but ...
The unemployment rate ticked down to 7.4 percent because of the jobs created but also because many people are dropping out of the workforce. The unemployment rate is based on a household survey and doesn't take into account those who have not searched for work in the last four weeks.
What does this mean for mortgage rates?
This somewhat disappointing jobs report could put a brake on rising mortgage rates this week and maybe even push them down slightly.
If anything, borrowers should be thankful this latest report won't push rates higher. That could have been the case if the payroll number had risen above expectations.
A stronger employment report would have given the Fed more reason to reduce the bond-purchase program. Mortgage rates have been on the rise since the Fed said it would reduce the stimulus later this year as long as the labor market continued to recover.
For now, mortgage rates will get a break. Enjoy it while you can.