Jobs Numbers Announcement Could Mean Higher Mortgage Rates – NMP Skip to main content

Jobs Numbers Announcement Could Mean Higher Mortgage Rates

Mar 10, 2023
jobs numbers
Senior Editor

Better-than-expected employment figures point to Fed raising rates in 2 weeks.

Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6%, the U.S. Bureau of Labor Statistics reported today. The better-than-expected numbers could lead the Federal Reserve Board to raise interest rates when it meets March 21, so lock those rates now.

Fed Chair Jerome H. Powell testified earlier this week before Congress that the tight labor market - along with high inflation - have been the major drivers behind the Fed increasing interest rates by 4.5% over the past year.

Both the unemployment rate, at 3.6%, and the number of unemployed persons, at 5.9 million edged up in February. These measures have shown little net movement since early 2022. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care.  Employment declined in information and in transportation and warehousing.

Joel Kan, deputy chief economist for the Mortgage Bankers Association, said in a statement, “The housing market typically benefits from strong employment conditions, but as monetary policy has tightened to combat inflation, bringing about higher rates and tighter financial conditions, homebuyers have pulled back over the past year. We expect the economy to go into a mild recession this year, and with that a cooling in home prices and lower mortgages rates, which should help affordability conditions and bring a gradual recovery in housing activity.” Kan predicts unemployment will hit 4.8% by year’s end.

First American Deputy Chief Economist Odeta Kushi said, “Wage growth climbed by 0.2% in February, which was the slowest monthly increase since February 2022. In the topsy-turvy, upside-down economic world we are in, rising unemployment and falling wage growth are a good thing for the inflation fight.”

Kushi added, “This report still reflects a strong labor market. Indeed, nearly a year into the central bank’s aggressive monetary tightening campaign, the labor market continues to show some immunity.”

About the author
Senior Editor
Keith Griffin is a senior editor at NMP.
Published
Mar 10, 2023
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