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Mortgage bonds rise after jobs report, despite hot labor backdrop

Unemployment edged up to 4.175% from 4.141% while participation rose 0.2%, leaving the report softer mainly on how the market interprets labor-force growth.

Reported · Written up by our desk · Mortgages

Mortgage News Daily reported that mortgage-backed securities climbed by more than 3/8ths after a jobs report that showed 29,000 jobs added versus 90,000 expected. The outlet also noted the 10-year Treasury yield fell by almost 6 basis points to the lowest levels in a week.

The move was tempered by the report’s unemployment and labor-force dynamics, Mortgage News Daily said. Unemployment rose to 4.175% from 4.141% and increased participation by 0.2%, which implied unemployment would have been 3.951% without the participation increase.

Mortgage News Daily added that the jobs report was not necessarily weaker than expected overall, with the main perceived shortfall tied to wage growth. The outlet also said the market has struggled to forecast nonfarm payrolls in a lower-growth labor force, helping explain why the reaction was muted.

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