CHM Blog

Jobs: Steady as she goes

If you’ve ever run a marathon, you may have heard the adage “You don't win the race in the first mile, but you can lose it.” Well, the April jobs report didn't win anything, but it didn't lose anything either. And right now? That's exactly what the economy needed.

The Bureau of Labor Statistics reported 115,000 nonfarm payrolls added in April, handily beating consensus forecasts that had ranged from 55,000 to 70,000. The unemployment rate held steady at 4.3%. On the wage front, a 3.6% year-over-year gain is running slightly ahead of both CPI and the Fed's preferred PCE inflation measure — meaning workers are, for now, holding onto real purchasing power.

That's not a given in this environment, and it matters. We'll get a clearer read after next week's inflation report for April, but for today, the bottom line is simple: after months of choppy prints and creeping concerns about deterioration, the labor market is stabilizing. It needs to crawl before it walks, and walk before it runs. April looks like a solid crawl.

For the Fed, that stabilization is genuinely welcome news. Policymakers are already navigating a crowded fire — inflation pressures from tariffs, geopolitical disruption, and recent tax cuts aren't going away. Some FOMC members, including non-voting ones, have floated the possibility of a rate hike as the committee's next move. A labor market that isn't falling apart gives a divided Fed, and its new Chair, the cover to stay focused on prices without having to worry about job losses at the same time — a cleaner fight.

For housing, the report lands as a net positive for a spring market that, while having shown real resilience, remains fragile. New home sales picked up in March, and April's inventory data suggests the market is still weathering the macro storm. Mortgage rates have been drifting back up, threatening to erase the affordability gains buyers had been counting on this season, and consumer confidence is still in the doldrums.

Against that backdrop, a steady jobs report — real wages holding, unemployment flat, solid hiring heading into late spring — provides a foundation buyers, sellers, and builders can at least build on. The next question is whether April's momentum holds and gives consumers something to run with this summer.

TBWS, Realtor

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are under some pressure today. The MBS market improved by +16 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Inflation, 3) Retail Sales.

1) Geopolitical: Over the weekend we learned that the One-Page Memorandum of Understanding (which was the basis for further discussion on ending the war) turned into a multipage response from Iran that really didn't agree to anything. The turmoil and swings in oil prices will continue to be a large factor for rates this week.

2) Inflation: We will get both CPI and PPI this week as well as Import Prices. The most weight will be on MOM CPI Core.

3) Retail Sales: The April Control Group for Retail Sales will get the most weight among bond traders. The stronger this number is, the worse it will be for rates (and vice versa).

The Fed: We should have Warsh installed as the new Fed Chair by Friday.

Treasury Auction: We have a lot of debt hitting the marketplace this week with Wednesday's 30Y getting the most attention.

05/11 3 YR Note

05/12 10 YR Note

05/13 30 YR Bond

This Week's Potential Volatility: High

This morning markets have started under some pressure due to geopolitics. Volatility has started at moderate to low levels but could become high with any major change in oil prices this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

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.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.