Mortgage rates continue taking signals from changing oil prices and ongoing tensions in the Middle East. But they took a break from the last night’s kerfuffle to focus on the another contributing force to rates: this morning’s BLS Jobs Report.
In July, the U.S. economy lost 23,000 jobs, surprising economists who expected employers to add almost 4X that amount. On top of that, payroll numbers for the previous two months were revised lower by a combined 103,000 jobs. I’ve never been a conspiracy theorist per se, but the astoundingly large initial miscalculations that make the headline make a guy start to wonder if the BLS is being pressured to spit out a low Unemployment Rate for the press. Today’s repost saw the Unemployment Rate drop a tenth to 4.1% in spite of the losses.
Average hourly earnings increased by just 0.1% for the month, below the consensus forecast. On an annualized basis, wages rose 3.2%—down from 3.4% the previous month. Earnings have now slowed to a pace not seen since May 2021. Wage growth momentum is slowing, but the 3.2% acceleration is more than 50% higher than the Fed wants to see (they was prices to remain stable). But the good news is that wages are keeping up with the cost of living, …Or is it that higher wages are also causing the prices of goods and services to commensurately rise?
