Employment didn't gain any headway in June, and that's supposed to be good news for people who have jobs and who qualify for mortgages.
The unemployment rate edged up to 9.2 percent in June, compared to 9.1 percent in May, according to the Labor Department. The economy grew by a net 18,000 jobs. That's an average of less than six jobs per county. That's meager. A month ago, the Labor Department estimated that the economy had grown by a net 54,000 jobs in May; that estimate has been revised down to 25,000. So in a nation of more than 300 million people, 43,000 got jobs in the last two months. To put that in perspective, imagine that you went to a ballgame with 7,000 spectators. On average, one of those spectators got a job in May or June.
Economists expected stronger job growth. When the employment situation is this bad, you normally expect bond yields to dive as investors sell stocks and buy bonds. That translates into lower mortgage rates. That last step hasn't happened in the early going today. Mortgage bond yields have risen a couple of blips.
We'll see how it shakes out. In this week's mortgage Rate Trend Index, I was one of the few people who predicted that mortgage rates would rise. I think the struggle over the national debt limit will affect mortgage rates more than the employment report will. And that's bad news for borrowers, because the uncertainty means rates might keep rising.