Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

ADP Employment

The first of this morning’s three economic releases was December’s ADP Employment report at 8:15 AM ET. It estimated the economy added 41,000 jobs in the private sector last month, falling a little short of the 46,000 that was predicted. However, it was a strong rebound from November’s loss of 32,000 payrolls. Since December’s number was below forecasts, we can label the data slightly favorable for bonds and mortgage rates even though bonds showing gains before the report was released.

Medium

Negative

ISM Service Index

We also got some insight into the status of the service sector with the release of December’s non-manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. They announced a reading of 54.4 that was an increase from November’s 52.6 and higher than the 52.2 that was expected. Since the increase is a sign of growth in the service sector of the economy, we have to label the news as unfavorable for bonds and mortgage rates.

Low

Neutral

Factory Orders

October's shutdown-delayed Factory Orders report indicated more weakness in the manufacturing sector. The 1.3% decline in new orders for both durable and non-durable goods was close to forecasts and is aged now, meaning the news did not influence this morning’s mortgage rates.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Tomorrow has two more pieces of data set to be posted. One is the weekly unemployment update that is back to its traditional Thursday release now that the holidays are behind us. It will tell us the number of people seeking unemployment compensation last week and helps gauge employment sector strength. Analysts are expecting to see 210,000 new claims for jobless benefits were filed, up from the previous week’s 199,000 initial filings. Rising claims are a sign of a softening employment sector, so good news for mortgage rates would be a much larger number.

Low

Unknown

Productivity and Costs (Quarterly)

3rd Quarter Productivity numbers will also be posted early tomorrow morning and is another report that was delayed by the shutdown. This is one of the few reports that a stronger than expected result is favorable for rates. High levels of productivity allow the economy to grow without inflation necessarily rising also. The second quarter update of this data showed a 3.3% pace of worker output. A noticeably larger increase could help lead to slightly lower rates tomorrow, but any reaction should be fairly minimal.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

ADP Employment

ISM Service Index

Factory Orders

Weekly Unemployment Claims (every Thursday)

Productivity and Costs (Quarterly)

Float / Lock Recommendation