Looking ahead - Employment Report Mixed
The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor releases the employment report. The report is derived from a household survey and an establishment (business) survey. Last week was a prime example of how the surveys can diverge.
The payrolls component of the employment report caused some uncertainty in the financial markets last week. Unemployment came in at 4.7% in September, exactly as expected. However, non-farm payrolls posted an 110,000 increase. Analysts expected payrolls to increase 100,000. In addition, the August payrolls figures were revised from down 4,000 to up 89,000.
While analysts had hoped the report would provide a solid indication of the state of the economy, it really left more questions than answers. The bond market fell pushing rates higher following the release. The bond market rallied with the weaker payrolls figures back in August and now the revised numbers show payroll gains. The Fed rate cut followed the weak August employment report and now traders are uncertain what the upwards-revised figures will mean for future Fed policy.
With mortgage interest rates relatively low, capitalizing on current levels is recommended to protect against future volatility.