NFP (nonfarm payroll) numbers MUCH higher than expected

The US added 321k jobs last month (forecast was 240k), the largest gain since November 2011.  Mortgage-backed securities and Treasuries slammed:  Expect mortgage rates to jump today from recent lows.  Unemployment rate remained the same at 5.8%.  September was revised up from 256k to 271k.

• NFP 321k vs 230k forecast
• Biggest increase since January 2012
• October revised to 243k from 214k; September revised to 271k from 256k
• Unemployment rate 5.8 vs 5.8 forecast
• Average hourly earnings +0.4 vs +0.2 forecast

One thing to remember, though:  If you are worried about how this will affect the housing market, jobs drive housing, NOT mortgage rates!  Jobs, Jobs, Jobs!  So this is good news for the economy as a whole.

Below is the 3-month chart on the 3.5 Fannie MBS.  Note that higher prices denote lower rates; we are still trending much lower than 3 months ago.

3 month