Good Morning!
Hope you had a wonderful weekend and a great start to the week! Sorry for the delay in sending. It’s been a busy couple of days and weeks. We had a great weekend at the Hauber Household. Most exciting part….talking a walk outside at 4:30 on Sunday afternoon to go get ice cream at Sweet Cow in our neighborhood. Was really exciting to see Noah cruisin’ on his scooter and to enjoy the first longer daylight day since late October. Spring is here!
Onto the market and I have no idea where to start. Last week started with a massive swing up in the 10 YR yield and it got all the way up to 4.22% on Monday morning. This is even after the worst jobs report we have had in 4 years. The Iran war and oil issue is pushing rates up in the near term. Once both settle down a bit, the market will go back to focusing on jobs and inflation, and with jobs heading in the wrong direction, inflation will follow and so will rates. Only problem is we will continue to have to wait and see. Go figure, we get the one jobs report that would have sent rates down fast, but it just happened to be during the same week as the Iran war and the market just didn’t even care (for the time being).
We are sitting back down at 4.11% today, so good news that we continue to find support to the upside at 4.20%, but 4% has been a tough customer on the downside. And for those looking to refinance, I have been banging the drum on this one. Timing the market is nearly impossible as no one knows what the future holds but look at the 10 YR yield chart below. Recently, 4% has given us lower rates for about 1-7 days and then heads right back up. If you zoom out, you can see that every decent drop has given us a few days to act before shooting right back up. As I have been preaching, take the cookie when the plate comes around. It might be a while before it comes back.
Have a wonderful week ahead!
1 Year Look at the 10 YR Yield:
Today:
Last Monday:
Last Week’s Market Commentary:
Weak February Jobs Report Signals Slowing Labor Market
- February job growth came in well below expectations, according to the Bureau of Labor Statistics. The economy lost 92,000 jobs, compared with forecasts calling for a gain of about 60,000, while the unemployment rate edged up from 4.3% to 4.4%.
- The latest report adds to signs of a cooling labor market. Payroll estimates for December and January were revised lower by a combined 69,000 jobs, further weakening the recent trend. Average job growth over the past year now stands at just 13,000 per month, and only 6,000 per month over the last three months.
- At the same time, the average duration of unemployment rose to 25.7 weeks, the highest level in four years, suggesting job seekers are taking longer to find new work.
ADP Hiring Beats Forecasts but Shows Labor Market Softness
- The latest Producer Price Index (PPI) showed wholesale inflation rising 0.5% in January and 2.9% year over year, both above expectations.
- Core PPI, which excludes food and energy, climbed 0.8% for the month and 3.6% annually, also exceeding forecasts
- The Federal Reserve continues balancing stubborn inflation against signs of labor-market cooling. Hotter-than-expected wholesale prices reinforce a cautious stance on further rate cuts, even as softer employment data argues for easing. For now, stronger PPI readings may keep policymakers patient as they assess the path forward on interest rates.
Gig Work May Be Masking Labor Market Strain
- Private employers added 63,000 jobs in February, according to ADP, topping expectations of 50,000. Small businesses accounted for nearly all the gains (+60,000), while medium-sized firms cut 7,000 jobs and large companies added 10,000.
- Despite the headline beat, hiring remains uneven and concentrated in a limited number of sectors. Another sign of cooling: job switching is no longer delivering the same pay premium. Workers who change jobs are still seeing faster wage growth (6.3% annually) than those who stay put (4.5%), but the 1.8 percentage-point gap is the smallest on record — suggesting a less competitive labor market.
Additional Indicators Signal Labor Market Cooling
- Data from Revelio Labs showed 16,700 job losses in February in its nonfarm payroll tracking. The firm gained attention last fall when its data helped fill gaps during the government shutdown.
- Meanwhile, initial jobless claims remain relatively low at 213,000, but that figure may not fully capture layoffs in today’s economy. Some displaced workers are turning to gig or freelance work rather than filing for unemployment benefits, especially when benefits don’t fully cover living expenses.
- Continuing claims rose by 46,000 to 1.868 million, indicating unemployed workers are taking longer to find new jobs.
- Layoff and hiring announcements reinforce the same trend. Challenger, Gray & Christmas reported nearly 50,000 job cuts in February, following 108,000 layoffs in January. Combined cuts for the first two months of the year rank among the highest since 2009.
- At the same time, hiring plans remain weak, with companies announcing just 18,061 planned hires through the first two months of the year — a 56% decline from the same period last year.
- Rising continuing claims, elevated layoff announcements, and subdued hiring plans all point to a labor market gradually losing momentum.
Jobs Data In Chart Form
The Relationship Between the 10 Year Yield and Mortgage Spreads & 30 YR Fixed Mortgage Rates
Current Spread of 10 YR Treasury to 30 YR Fixed Rates remained at 1.94% today (same as last week). We are almost back to the long-term average of 1.50% – 1.80%.
With a lower 10 YR yield (and with less volatility) and better spreads, I am showing the approximate ranges for mortgage rates FOR PURCHASES based on the 10 YR yield (picture is from 2/2/2026).
Due to Fannie/Freddie LLPA’s, rates on refinances are about .125-.250%, higher on average, than purchases.
Long-Term Mortgage Spread Chart (1970-2025):
This Week’s Economic Data & Reports:
- MON – No News
- TUES – NFIB Small Business Optimism Index (below expectations), ADP Employment Weekly, Existing Home Sales, 3-Year Note Auction
- WED – MBA Mortgage Applications, CPI (Consumer Price Index), 10-Year Note Auction
- THURS – Jobless Claims, Housing Starts, 30-Year Bond Auction, Building Permits
- FRI – PCE (Personal Consumption Expenditures), Durable Goods, Q4 GDP Revisions, JOLTS, Consumer Income and Spending, Michigan Consumer Sentiment
People have asked where to track this stuff daily so here is the Bloomberg Website where you can see the reports/data:
https://www.bloomberg.com/markets/economic-calendar
Thanks for reading and have a great day!
