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Job Gains Slow, Manufacturing and Services Remain Strong

Overview: The past week was relatively quiet for mortgage markets. While the key labor market data was a bit weaker than expected, the other major reports were right on target, and they all caused little reaction. Mortgage rates remained near record-low levels.


According to the most recent data, the solid rebound from unprecedented job losses has continued, albeit at a slower pace. In November, the economy gained 245,000 jobs, below the consensus forecast of 450,000. The economy has now recovered more than half of the 22 million jobs lost in March and April. The unemployment rate matched expectations at 6.7%, falling from a peak of 14.7% in April and a level of 6.9% last month. Average hourly earnings, an indicator of wage growth, were an impressive 4.4% higher than a year ago.

Two significant reports from the Institute for Supply Management (ISM) released this week were close to anticipated levels. The ISM Services Index came in at 55.9, far above the level of 41.8 seen in April following the partial shutdown of the economy. Readings above 50 indicate an expansion. The ISM Manufacturing Index was even stronger, at 57.5. Since many consumers are spending less money on travel and leisure activities, they are buying more goods, which has boosted manufacturing activity.


Unemployment Rate (%)

Week Ahead

December 10 — Consumer Price Index (CPI)

December 16 — Retail Sales Report

December 16 — U.S. Federal Reserve meeting



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