Last Updated: 10/05/2007

Friday's bond market has opened down sharply following the release of this morning's Employment report. The stock markets are reacting favorably to the news with the Dow up 84 points and the Nasdaq up 35 points. The bond market is currently down 26/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point. Softening the blow to this morning's rates is strength in bonds late yesterday that prevented rates from rising by another .250 of a discount point. The Labor Department gave us this morning's news, saying that the unemployment rate rose to 4.7%, that 110,000 new jobs were added and that average earnings rose 0.4%. The earnings increase was a little higher than expected, which is bad news for bonds because it raises concerns over wage-inflation. The other two headline numbers matched or were close to forecasts. Please have a safe and pleasant weekend.