Updated on May 5, 2021 10:06:15 AM EDT

April’s ADP Employment report was posted at 8:15 AM ET this morning, showing 742,000 private sector jobs were added back to the economy last month. Forecasts were calling for 800,000 jobs, hinting that the private sector employment situation wasn’t as strong as thought. This was still an increase from March’s revised 565,000 though, showing gains month over month. The weaker than expected number is favorable for rates, while the increase from March can be considered a negative. Therefore, it is safe to label this report neutral for bonds and mortgage rates.

Tomorrow has two moderately important releases that we will be watching, starting with last week’s unemployment figures. They are expected to show 530,000 new claims for unemployment benefits were filed during the week, down the previous week’s 553,000. Rising claims is a sign of employment sector weakness, meaning the higher the number tomorrow, the better the news it is for mortgage rates.

1st Quarter Productivity and Costs data is also set for release at 8:30 AM ET tomorrow. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. This update will likely be a non-factor for rates though, unless it shows a significant variance from forecasts. Productivity is expected to have risen 5.0% while labor costs fell 1.6%.

 ©Mortgage Commentary 2021