Friday's bond market as opened well in negative territory following the release of stronger than expected employment news. The stock markets are reacting favorably to the data with the Dow up 61 points and the Nasdaq up 21 points. The bond market is currently down 26/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.
This morning's key economic data came from the Labor Department who gave us August's Employment report. It showed that the U.S. unemployment report rose to 9.6% as expected. The bad news came in the other two primary readings that the markets follow. The data showed that only 54,000 jobs were lost last month when analysts were expecting to see a loss of 120,000. Also, the average hourly earnings reading rose 0.3% when forecasts called for a 0.1% increase.
The fewer job loss number indicates a stronger employment sector than many had thought. The stronger earnings also raises concern for the bond market because it gives consumers more money to spend. Therefore, this report was not good for bonds and mortgage rates and is the cause of this morning's selling.