HousingWireHousingWire
All eyes are on the jobs report tomorrow after a string of weak economic reports over the last week. Large-scale layoffs of government workers, President Trump’s back-and-forth tariff policies and a negative forecast for first-quarter GDP have sparked questions about a recession and how that would impact mortgage rates and housing.
In an episode of the HousingWire Daily Podcast that will air Friday, HousingWire Lead Analyst Logan Mohtashami outlined what to pay attention to in the jobs report. Here are the top three things to look for:
1. Wage growth
“The Fed does not like wage growth picking up. So, if wage growth stays flat or goes lower, that’s positive for mortgage rates.”
2. Job growth
“If job growth is slowing down, and noticeably — if you’re sub 100,000…keep an eye on that. Job growth slowing down, wage growth slowing down, that’s all beneficial for rates.”
3. Hours worked
“This could be beneficial for the 10-year yield going lower, because the one thing with the labor data this year is, again, the Fed set a very low bar. This report and the next two or three reports will have all the DOGE cuts in terms of firings.”
Mohtashami said he is watching how the overall economy reacts to actions of the Trump administration and their comments that they want to see lower rates.
“I’m more interested in the money being withdrawn and how that affects other states. And any state that has federal funding out there is at risk of slowing down,” Mohtashami said. “So, I think that’s why 2025 labor data will be interesting to see. Is it enough decrease in the spending to matter?
“But the key is if the labor force stays constant or rises, that can allow the unemployment rate to go up. And then the Fed has to make a comment. This has really been a fascinating week between the trade deficit, Germany spending, the negative GDP data — and then it’s jobs week as well.
“But we’re getting to the point to where [taking money out of the system] is purposely done and we see the aftermath of it because it’s been such a sharp withdrawal of money and people leaving. Is it enough to really tilt the private sector, which is what really matters? I’m sure the White House is very happy that mortgage rates are heading lower.”
Mohtashami noted that Friday’s labor data will show where the 10-year yield is going and then next week we’ll get the job openings data. “The job openings data is really critical because the Fed’s a huge fan of the job openings data,” Mohtashami said.
