As we discussed yesterday, markets often react in predictable patterns. The initial shock has begun to wear off, with both the oil and bond markets stabilizing. If this trend continues, it should support mortgage rates gradually moving back toward the lows we saw last Friday.

ADP Employment Report came in with 63,000 jobs created, a bit stronger than the 50,000 expected but still w weak number. Let’s break it down.

The lion share came from Education/Health Services. a whopping 58,000 jobs. These jobs are not economically sensitive meaning it’s a stable baseline of employment regardless of the economy.

Remember last week when the BLS reported 130,000 new jobs? ADP has now revised its January numbers down from 22,000 to 11,000.

What does this tell us? It points to a softer labor market, with less aggressive hiring and reduced competition among companies for talent. Revisions like this are often early indicators of a slowing economy.

From a rate perspective, a cooling job market can ease inflationary pressure, which is generally supportive of lower interest rates.

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