So today the economy added 110k new jobs, according to the Labor Department. In addition, the 4,000 jobs it said were lost last month were revised upwards to 89,000 new jobs created. How you miscalculate by 93,000 jobs (89k + negative 4k, for those of you who need the help) is well beyond my understanding. It’s hard to argue in the face of ostensibly good economic news, but mortgage bonds are getting trashed this morning with the FNMA 6.0% bond down 28bps. The bottom line is, mortgage backed securities hate inflation and strong economic news means inflation is just as strong a possibility. This is why I have favored a locking bias all week in advance of today’s Labor Department blurt. The jobs report is always revised a month after it is delivered, and a loss of 4k jobs last month just didn’t make any sense at all. The only direction for that number to go was up, and up it went. Bummer for those of us looking for 30-year fixed mortgages right now. This will be enough to push us back down to the 200-day moving average. Hopefully we’ll have enough support there to bounce off instead of sink below it.
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