CHM Blog

Hiring hibernation meets wage growth

"It's tough to make predictions, especially about the future,” was one of those lines baseball character Yogi Berra made famous. That somewhat goofy sounding wisdom feels particularly applicable when looking at December's employment numbers, which paints a picture that's simultaneously concerning and encouraging, depending on which data point hits you hardest.

According to Realtor.com's Jake Krimmel, the final jobs report of 2025 delivered exactly the kind of contradictory snapshot that makes economists reach for a bottle of aspirin. Payroll growth limped in at just 50,000 new positions, well below expectations and a clear signal that hiring enthusiasm remains nothing more than tepid. The private sector contributed a measly 37,000 jobs while government employment added 13,000, and previous months saw downward revisions only complicated further by lingering shutdown-related complications.

But wait. There’s more. Because here’s where things get interesting. While hiring slowed to a crawl, the unemployment rate actually dropped from November's worrying 4.6% (later revised to 4.5%) down to 4.4%, or more precisely, 4.38% before rounding. Meanwhile, wages showed some muscle, climbing 3.8% year over year. What emerges is a portrait of what Krimmel calls a "low-hire, low-fire" labor market — one that's neither collapsing nor exactly thriving as we head into 2026.

For the Federal Reserve, this mixed bag essentially slams the door on a much-hoped-for January rate cut. The falling unemployment rate combined with solid wage growth removes any sense of urgency to adjust rates downward, despite the anemic hiring numbers. With inflation and real earnings data still pending next week, the Fed will almost certainly maintain its wait-and-see posture unless inflation figures come in shockingly low.

Housing market implications are nuanced but lean positive as mortgage rates found their footing in recent weeks. Krimmel reminds us that housing demand ultimately rests on not just the anticipation of rate cuts, but labor market stability and real income growth as well. The uptick in real wage growth as 2025 ended represents genuinely good news for workers and would-be homebuyers, even as affordability challenges continue casting shadows over activity levels.

According to Realtor’s December housing data, the market finished 2025 quietly and unevenly across different regions. Looking toward 2026, a more stable labor market with reduced downside risks should bolster household confidence and encourage first-time buyers, particularly as housing affordability has at last become an administration priority.

Realtor, TBWS

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 moving sideways today. The MBS market improved by +31 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three areas that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Inflation and 3) The Fed.

1) Geopolitical: We saw huge upward swings last week due to geopolitical events. The long bond market will continue to be very sensitive to this area.

2) Inflation: We will get CPI on Tuesday and PPI twice (two months worth) on Wednesday.

3) The Fed: At the end of this week, the Fed will enter their media blackout period leading into the January FOMC Meeting. We will hear from a ton of speakers this week and get the Fed's Beige Book.

Treasury Auction: Here is this week's Treasury auction schedule.

01/12 3YR Note

01/12 10YR Note

01/13 30YR Bond

This Week's Potential Volatility: High

This morning markets are moving sideways. Volatility has started at moderate to high levels and could easily become high later in the 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.

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