Weekly Mortgage Market Report

The big economic news this week was Friday's Employment data, which fell short of Wall Street forecasts and pushed mortgage rates lower. Investors continued to watch the situation in Europe, but there were no major market moving developments. Due to a rally on Friday, mortgage rates ended the week lower.

The May Employment report revealed the largest monthly increase in jobs since March 2000, but nearly all of the gains came from the hiring of temporary census workers. Without the census workers, the data fell short of expectations. A total of 431K jobs were added in May, below the consensus forecast of 500K. 411K jobs came from census hiring, leaving a net gain of just 20K jobs when those workers are excluded. The Unemployment Rate dropped to 9.7% from 9.9% in April, but this was mostly due to people dropping out of the labor force. Investors had expected stronger results from private sector job growth, and the stock market fell after the news. Weak labor market figures generally lead to lower inflation and are favorable for mortgage markets.