Mortgage investors will spend the balance of the day putting the finishing touches on their risk management positions in front of tomorrow morning's (8:30 a.m. ET) release of the much anticipated February nonfarm payroll report. The consensus forecast among economists is calling for a drop of 60,000 jobs for the headline nonfarm payroll figure -- and an uptick in the national unemployment rate to 9.8% from January's 9.7% mark. Earlier this week the general view among economists was that Friday's headline nonfarm payroll would show 50,000 more jobs were lost last month than were created.
If the consensus forecast proves accurate, tomorrow's employment data will tend to be supportive of steady mortgage interest rates. The mortgage market has already priced-in the consensus estimate values for the nonfarm payroll data series - so it will likely take a slump in the headline number of 70,000 jobs or more and/or a surge in the national jobless rate to 9.9% or higher to fuel a rally strong enough to be supportive of fractionally lower mortgage interest rates. In the highly unlikely event the February nonfarm payroll data shows a loss of 10,000 or fewer jobs and/or the national jobless rate posts a reading of 9.7% or lower -- look for mortgage investors to push mortgage interest rates higher from current levels.
News early this morning that initial claims for unemployment declined 29,000 for the week ended February 27th garnered little more than a passing glance from mortgage investors. The upward revisions to fourth-quarter productivity and the attendant downward revision to fourth-quarter unit labor cost were noted - but otherwise had no discernable impact on the trend trajectory of mortgage interest rates today.
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