CHM Blog

Markets are waiting for tomorrow’s January employment data. In the release tomorrow BLS will report revisions in employment back to March 2024. Every year in January BLS reports revisions with more data at its disposal. Back in August BLS issued preliminary revisions that rocked markets, reporting there were 818K less jobs that were originally reported; according to expectations the revision is not likely to match the prelim release some economists thinking 600K to 700K, still a huge revision. Beside surveying businesses to establish job growth, the revisions include household surveys and takes into account population changes and includes immigration changes.

At 8:30 am ET weekly jobless claims expected at +215K increased to 219K +11K from the prior week. Continuing claims, now a key factor in the report, increased again. Recurring claims rose by 26,000 to 1,886,000 in the previous week, ahead of market expectations of 1,870,000. Despite remaining robust against a historical perspective, the data was in line with the view that the US labor market is due for a slight degree of softening in 2025. The four-week moving average for initial claims, which smooths week-to-week volatility, rose by 4,000 to 216,750.

Q4 productivity and unit labor costs, productivity declined from estimates as did unit labor costs. Productivity increased by 1.2% in the fourth quarter of 2024, following a revised 2.3% growth in the previous quarter and falling short of market expectations of a 1.8% rise, it is a preliminary report. Unit labor costs rose by 3.0% against 3.3% expected. On an annual basis, labor productivity increased by 1.6%. For the full year of 2024, average productivity saw a 2.3% increase.

Two days ago, the JOLTS job openings were less than thought. This morning Challenger, Gray & Christmas, Inc. reported job cuts at 49,795 job cuts in January 2025, above 38,792 in December but down 40% from 82,307 a year earlier. It is also the lowest January job cut total since 2022. Technology led all sectors in job-cutting activity in January with 7,488, Challenger commenting the tech sector is focusing on efficiency and likely more cuts coming. “If wage growth and weekly hours worked remain stable despite the downward revision in employment, it would reinforce the idea that the economy remains resilient — and that the revision is more about accounting adjustments than a true economic slowdown,” said Alexander Bick, senior economic policy advisor at the Federal Reserve Bank of St. Louis.

At 9:30 am the DJIA opened quietly +62, NASDAQ +25, S&P +12. 10 year at 9:30 am 4.44% +1 bp from yesterday. FNMA 6.0 30 year coupon at 9:30 am -12 bps from yesterday’s close and -1 bp from 9:30 am yesterday.

The Bank of England cut rates today as was widely expected. The BOE cut rates by a quarter percentage point to 4.5%, for the third time since August and lowered its forecasts for U.K. economic growth, which is already trailing far behind the U.S.

Nothing left on the calendar today.

PRICES @ 10:00 AM

10 year note: 4.45% +2 bp

5 year note: 4.28% +3 bp

2 year note: 4.21% +2 bp

30 year bond: 4.65% +2 bp

30 year FNMA 6.0: @9:30 am 100.89 -12 bps (-1 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.62 -12 bps (-2 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.98 -1 bp (+11 bp from 9:30 am yesterday)

Dollar/Yen: 152.00 -0.61 yen

Dollar/Euro: $1.0368 -$0.0035

Dollar Index: 107.87 +0.30

Gold: $2,880.30 -$13.10

Bitcoin: 98,300 +974

Crude Oil: $71.43 +$0.40

DJIA: 44,864 -10

NASDAQ: 19,723 +27

S&P 500: 6071 +10

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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