SORRY FOR MY ABSENCE THE PAST FEW DAYS...
The number of Americans standing in line to file first-time jobless benefits rose by a stronger-than-expected 20,000 last week. Today's jobless claims report will have no influence on tomorrow morning's far more important nonfarm payroll figures because the weekly data fell outside of survey period for the larger and more comprehensive October national employment figures.
In a separate report Labor Department figures showed third-quarter non-farm productivity rose a much stronger-than-anticipated 1.9% while unit labor costs, a gauge of potential wage driven inflation pressures watched by the Fed, dropped 0.1%.
Today's macroeconomic mumbo-jumbo collectively and individually tells a story of a labor market that is not improving as much as had been hoped. Until/unless the labor sector shows sustained improvement on both a week-over-week and month-over-month basis - this data will tend to be supportive of steady to perhaps fractionally lower mortgage interest rates.
Most analysis believe tomorrow morning's 8:30 a.m. ET release of the October nonfarm payroll data will show the economy created roughly 75,000 more jobs than it lost - a condition that supported the national jobless rate at 9.6% -- the same level it has held since September. If this forecast proves accurate, the October payroll figure will be the first positive reading for the monthly jobs number since May. Investors have already priced in this expected outcome into the mortgage market - making an "as expected" report at best mortgage market neutral and at worst slightly mortgage interest rate unfriendly.
In order to be completely supportive of a notable move to lower rates and higher prices the October nonfarm payroll headline number will need to show the economy lost more jobs than it created while the unemployment rate edged up to 9.7% or higher. While such an outcome is certainly possible - at this juncture it does not appear to be very probable.
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