Why mortgage rates barely budged after jobs report beat estimates

Jobs Friday for August came with a bang to the upside, with 162,000 jobs created, positive revisions and an unemployment rate of 4.1%. All that — and the 10-year yield barely budged. In fact, we’ve had a lot of dramatic events this week and yields haven’t done much today, even with oil prices elevated and diesel prices back to yearly highs. The truth is, a lot is priced into the bond market now and it’s getting harder and harder to push yields — and mortgage rates — much higher. Let’s break down this jobs report because, to me, it puts the 3-month job-creation average a tad above my break-even of 78,000, as we’ve averaged 82,000 jobs created per month over the last three months, which means the Fed isn’t too concerned about the labor market. This means the Fed can focus on the inflation data, and inflation week is next week. The odds of a September rate hike rose a bit today after this report. BLS jobs report From BLS: Total nonfarm payroll employment increased by 162,000 in August, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places and in local government education. T...