Did A Weaker Jobs Report Help Bring Rates Lower?

What's Happening Today

Markets are reacting to two major developments today: a surprisingly weak February jobs report and a sharp surge in oil prices. While the labor market data showed significant job losses and rising unemployment, mortgage rates are facing upward pressure because markets are focused on the rapid rise in oil prices. Oil has surged roughly $20 since last Friday and about $10 just this morning, increasing inflation concerns and overshadowing otherwise rate-friendly labor market data.

Oil Prices Are Driving Market Reaction

• Oil prices have risen about $20 per barrel since last Friday
• Oil jumped roughly $10 just this morning alone
• Rising oil prices are dominating financial market sentiment right now
• Higher energy costs increase inflation concerns, which can push mortgage rates higher
• Officials noted the U.S. has not yet considered releasing oil from the Strategic Petroleum Reserve

The market expects that once geopolitical tensions ease and oil prices stabilize, mortgage rates could move lower again, but for now oil prices are driving rate movement.

February Jobs Report Shows Major Weakness

• The Bureau of Labor Statistics reported 92,000 job losses for February
• Economists had expected roughly 60,000 jobs to be added
• Healthcare lost 28,000 jobs
• Leisure and hospitality lost 27,000 jobs
• Construction lost 11,000 jobs

This report shows broad weakness across several sectors and highlights that the labor market has slowed significantly.

Job Growth Trends Are Extremely Weak

• The 3-month average job growth is only about 6,000 jobs per month
• The 6-month average is negative 1,000 jobs per month
• The 12-month average is 13,000 jobs per month

These trends show that the labor market has been losing momentum for several months and that February’s decline was not an isolated event.

Revisions Show Earlier Job Strength Was Overstated

• December was revised from +50,000 jobs to -17,000
• January was revised down by 4,000 to 126,000
• Combined revisions reduced payrolls by 69,000 jobs

With December now showing job losses and February reporting another large decline, January’s strong reading increasingly looks like an outlier.

Household Survey Signals Rising Unemployment

• The unemployment rate rose from 4.3 percent to 4.4 percent
• The exact figure was 4.44 percent, close to rounding up to 4.5 percent
• The household survey showed 185,000 jobs lost
• The labor force increased by 18,000 workers
• The U-6 underemployment rate declined slightly to 7.9 percent from 8.1 percent

The rise in unemployment combined with job losses in the household survey reinforces the weakening trend in the labor market.

Finding a Job Is Taking Longer

• The average duration of unemployment rose to 25.7 weeks
• This is the highest level since February 2022

Longer unemployment duration suggests hiring has slowed and displaced workers are having a harder time finding new jobs.

Final Takeaway

February’s jobs report showed significant labor market weakness, with payroll losses, rising unemployment, and downward revisions to prior months. Under normal circumstances, data like this would help mortgage rates move lower. However, the sharp surge in oil prices is currently dominating market sentiment and putting upward pressure on rates. Once oil prices stabilize and geopolitical tensions ease, the weak labor data could help mortgage rates improve.

If you are considering buying a home, refinancing, or helping clients navigate the market, understanding these shifting economic forces can help you make better timing decisions. Reach out anytime if you want to review your options or discuss current mortgage rate strategies.