Mortgage Rates Today, Oct. 4, 2024: Jobs Report Likely Bad for Mortgage Rates

In brief

This morning's September jobs report (aka the employment situation report) showed a thriving labor market. And that would typically be bad for mortgage rates. You'll find the detailed figures below.

Seven days ago, we assumed that the jobs report would be the overwhelming influence on markets and mortgage rates this week. But that was before Israel, Iran and Hezbollah began exchanging missiles.

Since then, oil prices have spiked as the chances of supply disruption have increased. A barrel cost $68.17 on Monday. Overnight, it stood at $73.71.

But that could be just the beginning. Yesterday, CNN Business quoted analysts who were forecasting $86 a barrel if Israel were to target Iranian oil facilities. And a whopping $100+ if Iran begins disrupting supply flows from other Middle Eastern countries through the Straits of Hormuz.

Such highs could ultimately affect general consumer prices as well as those for gas at the pump. And that higher inflation might force the Federal Reserve to reverse direction, pushing general interest rates (and mortgage rates) higher.

Of course, there are a lot of "ifs," "coulds" and "mights" in those scenarios. And we shouldn't panic yet.

So, this morning's jobs report remains crucial to mortgage rates. But it's no longer the only game in town.

Coming up

Mortgage rates today

We're coming to you later than normal this morning to bring you today's employment data.

Here are this morning's actual numbers along with what markets were expecting before publication, according to MarketWatch:

• Nonfarm payrolls (new jobs created in September) — 254,000 actual. Markets expected 150,000, up from 142,000 in August
• Unemployment rate — 4.1% actual. Markets expected 4.2%, unchanged since August
• Hourly wages — 0.4% actual. Markets expected a 0.3% rise, lower than the 0.4% increase in August
  

Mortgage rates tend to rise when data are better than expected and fall when they're worse. Today, that meant we were hoping for fewer new jobs, and a lower hourly wage increase, but a higher unemployment rate than forecast.

You'll see that all of today's data came in better or much better than markets were expecting.

Yes, sometimes investors respond to major economic reports in seemingly perverse ways. But it's hard to see how they could re-interpret such an unambiguously excellent (for the economy, not mortgage rates) report.

Next week

We're due consumer credit data next Monday. But next week's star report will be Thursday's consumer price index (CPI).

CPIs used to be each month's dominant report, but recently markets and the Fed have switched their focus to employment data. That focus may switch back if oil prices and global supply chains are further disrupted by events in the Middle East.

Still, none of the current fears will be reflected in next week's CPI, which covers September.

As always, we'll brief you on next week's significant reports before each is published.

Further ahead

Yesterday, Sam Khater, Freddie Mac’s chief economist, issued a statement to accompany the organization's weekly mortgage rate data:

"The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature," he said. "Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise. As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year."