Portland Mortgage Market Update — February 7, 2025

It was Jobs Week! Most of the reports coming out this week were mixed, but indicated a softening labor market. The JOLTs report (Job Opening and Labor Turnover) indicated fewer open positions were available, meaning companies are tightening up and employees are more likely to endure a job they don't like since there aren't as many opportunities elsewhere. The ADP report supported this, with "Job Stayer" increasing to 4.7% and "Job Switchers" came in at 6.8% vs 6.9% from last month. This spread is very low, which indicates there isn't a lot of heavy poaching from companies to steal away other employees.

Things culminated with today's BLS jobs report, which showed 143K new jobs being created in January, which is quite a bit weaker than the estimates of 170K. Normally, this would be good for rates, but the unemployment rate fell from 4.1% to 4.0%. To my logic, if there are fewer jobs and fewer hirings happening, it would make sense that unemployment would (temporarily) tighten up. However the market is latching onto this and rates are worsening a bit as we speak.

But all hope is not lost! Next week brings the CPI and PPI reports which look like they should be favorable to the bond market. They are replacing some higher numbers from last year, so ideally this could set up a nice little run for interest rates in the coming weeks.