Morning Report: June payrolls rebound in a big way 7/8/16

Vital Statistics: Last Change
S&P Futures 2112.0 15.0
Eurostoxx Index 324.3 2.1
Oil (WTI) 45.5 0.4
US dollar index 87.1 0.1
10 Year Govt Bond Yield 1.41%
BankRate 30 Year Fixed Rate Mortgage 3.44

Stocks are higher after the jobs report came in stronger than expected. Bonds and MBS are down small

Jobs report data dump:

  • Nonfarm payrolls + 287k
  • Two month revision -6k
  • Unemployment rate 4.9%
  • Labor force participation rate 62.7%
  • Average weekly hours 34.4
  • Average hourly earnings + 0.1% (+2.6% YOY)

The payrolls number is certain to get everyone’s attention, however some of that might be a catch-up from May, which was revised downward to only 11k jobs. The 3 month average is 147k. Given Brexit, this report probably doesn’t move the needle for the Fed. Until we start seeing more evidence of wage inflation the Fed isn’t going to be aggressive.

Mortgage rates have lagged the move downward in Treasuries. As we saw in 2012, bond yields bottomed out in July, but mortgage rates continued to fall for another 4 months, finally bottoming in November. We are seeing the same thing again, where mortgage rates have fallen with the 10 year, but nowhere near as dramatically. Note the MBA keeps bumping up its forecast for 2016 volume.

11 Responses

  1. And my payroll hasn’t changed in 5 years. Wage stagnation!

    And . . . Frist!

    Like

  2. Anyone suppose we will get any columns decrying the violent rhetoric of Black Lives Matter? I guess they aren’t as bad as those nutty tea partiers..

    Like

  3. PL hasn’t changed a whit…

    Like

  4. President Obama said Saturday it’s hard to “untangle the motives” of the shooter who killed five Dallas police officers, despite the gunman telling police he wanted to kill white police officers.

    http://www.washingtontimes.com/news/2016/jul/9/obama-says-motives-dallas-cop-killer-micah-xavier-/

    Is he really that fucking dense? I have no idea what he thinks burying the motive will buy him (or the US)

    Like

  5. I suppose that when this information was immediately released, it was obvious it wasn’t an “assault rifle”

    a WWII era SKS.

    http://www.nytimes.com/2016/07/10/us/dallas-quiet-after-police-shooting-but-protests-flare-elsewhere.html?_r=0

    http://www.westernjournalism.com/what-the-media-wont-say-about-the-gun-used-in-dallas-shooting/

    Like

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