The mortgage market took-one-on-the-chin this morning following the release of the November private employer report from ADP Employer Services.
According to data compiled by ADP -- private employers added a stronger-than-forecasted 93,000 jobs in November; the biggest one month rise in this metric since November 2007. The October private sector employment gain was revised up from the 43,000 originally reported to 82,000.
Most analysts are now assigning a better than 60% chance to the likelihood Friday's much anticipated November nonfarm payroll headline will exceed the economists' consensus estimate now calling for a gain of 150,000. After today's mortgage market swoon, I doubt a stronger-than-expected November report will cause much of a stir - but a number that matches or falls below the consensus estimate will almost certainly be mortgage market friendly. The ADP data is notorious for missing the government's numbers by a wide margin - so there is still a chance that a supersized jobs report on Friday is not completely "baked-in-the-cake."
Worth noting -- national recognized employment consultants Challenger, Gray & Christmas are reporting the number of planned layoffs rose in November to the highest level since March. According to company compiled data -- the number of employees that will be cut from corporate payrolls rose 28% from October to November.
In a separate report the government took a little more wind-out-of-the-sails of those who believe the labor sector is solidly on the road to recovery when it released the revised third-quarter productivity figures earlier this morning. The data showed productivity rose at an annual rate of 2.3% rather that the 1.9% originally reported, a clear indication employers squeezed more output from workers. Labor costs crept higher by a very modest 0.1%. As long as productivity continues to rise - the necessity of adding more headcount to corporate payrolls will remain low.
In other news of the day, the Mortgage Bankers of America reported their mortgage application survey for the week ended November 26th dropped 16.5% from the previous week. The lion's share of the decline was created by a slump in refinance requests which fell 21.6% during the period. The number of purchase applications increased by 1.1%. Refinance applications still account for 3 out of very 4 applications in process. The contract rate for 30-year fixed rate mortgages finished at 4.56%, up by 6 basis points from a week earlier, up 27 basis points from four weeks ago, and down by 23 basis points from the year ago mark.
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