Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

Fed Beige Book

Today’s only relevant economic information will come at 2:00 PM ET when the Federal Reserve releases their Beige Book report. It details economic conditions throughout the U.S. via business contacts in each Federal Reserve region and is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. Analysts are expecting to see weaker activity and more concerns about future growth since the previous update. If there is a reaction in the bond market or mortgage pricing, it will happen during mid-afternoon hours.

Medium

Unknown

ADP Employment

There are three economic reports that may influence mortgage rates tomorrow, in addition to the weekly unemployment update. Starting the day’s releases will be May's ADP Employment report at 8:15 AM ET. It tracks changes in private-sector jobs, using ADP's payroll processing clients as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows later in the week. Forecasts show 160,000 private sector jobs were added to the economy during the month. The smaller the increase in jobs, the better the news it is for mortgage rates.

Medium

Unknown

Productivity and Costs (Quarterly)

Next up will be revised 1st quarter Productivity and Costs data that measures employee output and employer costs for wages and benefits. This 8:30 AM release is also considered to be moderately important because it helps us measure wage inflation. Many analysts believe that the economy can grow with low inflationary pressures when productivity is high. Last month's preliminary reading revealed a 2.7% decline in productivity and a 6.3% jump in labor costs. Tomorrow’s update is predicted to show little change. Due to the age of this data now, it likely will not have a noticeable impact on tomorrow’s trading or mortgage pricing.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures will also be posted at 8:30 AM ET. Rising claims are a sign of employment sector weakness, so good news for rates would be a sizable increase from the previous week’s number. It is expected to show 233,000 new claims were made, up 4,000 from the previous week. Since this is only a weekly snapshot, it will take a wide variance from expectations for it to move rates.

High

Unknown

ISM Index (Institute for Supply Management)

Closing tomorrow’s activities will be the release of the Institute for Supply Management's (ISM) May manufacturing index at 10:00 AM ET. This is one of the week’s highly important economic reports. A reading below 50 means that more surveyed manufacturing executives felt business weakened during the month than those who felt it had improved. Analysts are expecting to see a 47.1 reading in this month's release, unchanged from April. A lower reading will be good news for the bond market and mortgage shoppers while an increase could contribute to higher rates tomorrow.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Beige Book

ADP Employment

Productivity and Costs (Quarterly)

Weekly Unemployment Claims (every Thursday)

ISM Index (Institute for Supply Management)

Float / Lock Recommendation