Washington First Mortgage Loan Corporation
4055 Lake Washington Blvd. Suite 100
Kirkland, Wa. 98033
NMLS# CL-854647
P: 1-425-803-9061
F: 1-425-968-9464
 

 



Washington First Mortgage Loan Corporation
4055 Lake Washington Blvd. Suite 100
Kirkland, Wa. 98033
NMLS# CL-854647
P: 1-425-803-9061
F: 1-425-968-9464
 


Thursday, August 06, 2020
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Market Commentary

Updated on August 6, 2020 10:02:50 AM EDT

Last week’s unemployment figures were posted at 8:30 AM ET this morning, showing that 1.186 million new claims for unemployment benefits were filed last week. This was a decline from the previous week’s revised 1.435 million initial filings and noticeably lower than forecasts of 1.4 million. Fortunately, bonds were doing well during overnight trading and this was the 20th consecutive week of over 1 million new claims- indicating employment sector weakness. That has allowed bonds to remain positive after the data was posted this morning.

Tomorrow morning brings us the July Employment report at 8:30 AM ET. This extremely important release will give us the U.S. unemployment rate, number of jobs added or lost during the month and average hourly earnings. The best scenario for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings. Analysts are expecting to see that 2 million jobs were added back to the economy last month while the unemployment rate fell to 10.5% from June’s 11.1%.

Theoretically, the increase in new payrolls and decline in the unemployment rate would be unfavorable news for rates. However, the employment sector is still trying to recover from the shutdown, meaning even though these headline numbers would show progress in the sector, they still would indicate serious trouble in the labor market. Since bonds and mortgage rates tend to thrive in weaker economic conditions, headline numbers that fall short of or match those forecasts should lead to lower rates tomorrow.

 ©Mortgage Commentary 2020

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