Even with the increasing number of layoffs in some industries, the overall job market remains strong. Another 263,000 net new payroll jobs were added in November. The hourly wage rate grew by 5.1% from a year ago. The unemployment rate remains tight at 3.7%.
Generally, a strong job market at this phase of the business cycle with high consumer price inflation would mean a more aggressive interest rate hike by the Federal Reserve. However, mortgage rates have already tipped down for the third straight week, and further declines in mortgage rates appear likely. The 10-year Treasury bond yield's reaction to the jobs news was slightly negative, with the yield rising to 3.6%. This is still measurably lower than 4.2% in early November. The 30-year mortgage rate could be near 6% in a month or two (compared to 7% just one month ago).
After a difficult period in recent months for home sales, the falling mortgage rates and net new job additions should help support housing demand going forward.