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  • November Job Report

    Mortgages are lower after a stronger-than-expected employment report. Nonfarm payrolls rose by 146k vs. the consensus of +85k.  The headline rate dropped to 7.7% from 7.9% a month ago.  A weak report would have been easy to charge off to Hurricane Sandy, but strength in employment is a little harder to rationalize given the recent trends in economic conditions.  A closer look at the headline unemployment rate reveals that the drop in rate is actually due to a  350k decline in the labor force, with employment dropping by -155k and unemployed dropping by -229k.  So better number, but for the wrong reasons.  We’ve seen decent profit taking from hedge funds into the down trade post-NFP, leaving current coupons down 5+/32nds on the day.  While lower on the day, I don’t see anything that suggests mortgages won’t continue to grind higher.

    Stocks are up modestly with the DOW +42 pts.

    Dec 7 2012