6/3/10

This morning we had the private ADP jobs number, with usually a dubious correlation between this number and the unemployment data which will come out tomorrow. ADP’s report, for example, does not include census hiring (since it is government related), but still showed a gain of 55,000 for its 4th consecutive increase. Tomorrow’s nonfarm number is expected to be up over 500,000, a strong number for the economy. That isn’t to say that rates won’t move higher even if the number comes in as expected – they already are! We also had Initial Jobless Claims out this morning, down 10,000, with the 4-week moving average creeping higher. Also, 1st Quarter Productivity came out at 2.8% with Labor Costs -1.3%, with little change in rates, and still ahead of us Factory Orders (expected +1.8%), the ISM Nonmanufacturing index (expect unchanged), and the auction amounts for next week’s Treasury sale (expect about $80 billion). With all of this we find mortgage prices worse this morning.