Mortgage Rates mostly flat ahead of the 4th of July weekend

Happy Friday from Local Mortgage!

Most of the economic news was good for mortgage rates this week but rates climbed up just a bit due to a flood of trading associated with end of the quarter positioning. We will end the week back at 6.25% for our best 30-year fixed conventional scenario.

With oil prices stabilizing this week, the biggest economic news for mortgage rates came from the June employment report, which was significantly weaker than expected. The U.S. economy added just 57,000 jobs in June, well below the consensus forecast for a gain of 115,000 and the fewest since February. Revisions also reduced payroll estimates for the previous two months by a combined 74,000 jobs. Hiring was strongest in professional services, social assistance, and healthcare, while leisure and hospitality experienced notable job losses.

Wage growth remained moderate, with average hourly earnings increasing 0.3% for the month, in line with forecasts. On an annual basis, wages rose 3.5%, up from 3.4% the previous month (the slowest pace of growth since May 2021) and below the current inflation rate. The unemployment rate unexpectedly declined to 4.2% from 4.3%, but the improvement was not entirely encouraging. The drop was largely driven by people leaving the labor force rather than stronger hiring. This can be seen in the unexpected decline in the participation rate (the percentage of working-age people in the labor force) to just 61.5%, the lowest level since March 2021, suggesting softness in the labor market.

Looking ahead, attention will remain fixed on the conflict in the Middle East and the proposed deal to ease tensions. Investors also will monitor comments from Fed officials about future monetary policy. The detailed minutes from the June 17 Fed meeting will come out on Wednesday. For economic data, the ISM national services sector index will be released on Monday and Existing Home Sales on Thursday.

Hope everyone has a great 4^th of July weekend and thank you for reading.