Market Recacp
Against a consensus forecast of 235K, the economy added 214K jobs in October. Revisions to prior months added 31K jobs. The economy has added an average of about 220K jobs per month so far this year, which is the fastest pace in over ten years. The Unemployment Rate declined to 5.8%, the lowest level since July 2008. Average Hourly Earnings, an indication of wage increases, were just 2.0% higher than one year ago. Bottom line, the job gains were roughly in line with expectations, but the low level of wage inflation was favorable for mortgage rates.
The results of this week's elections were largely as expected with the Republicans gaining control of the Senate and adding to their majority in the House. There was little immediate market reaction. So, will a Congress lead by the GOP mean that changes are coming for the mortgage market? The general belief is that there will be no significant changes any time soon, and probably not before the next Presidential election. The continuing conservatorship of Fannie Mae and Freddie Mac is the biggest industry issue Congress needs to address, but the complexity of any substantive reform and the significance of Fannie and Freddie to the housing market make this a very difficult issue.
Next week will be a light one for economic events. The JOLTS report, measuring job openings and labor turnover rates, will come out on Thursday. Retail Sales, which account for roughly 70% of economic activity, will be released on Friday. There will be Treasury auctions on Monday, Wednesday, and Thursday. Mortgage markets will
be closed on Tuesday in observance of Veterans Day.
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