Good Morning on this fantastic Friday from your Hometown Lender,

Today brought the biggest data set of the month, the BLS jobs report (and associated components).

Breaking it down below:

• The BLS claims 275,000 jobs were created (I am skeptical), which is much higher than the 200k that was estimated. The gov’t made up 52k of those new jobs, and the last two months were revised down -167k (-43k in December and -124k from last month’s ridiculous number of 353k).The strong increase in new payrolls should have been bad for bonds/rates… but was counteracted by the rest of the data.
• Average hourly wages rose 0.1% from January and 4.3% from a year ago, but that is lower than expected and much lower than what we have been seeing (a revised 0.5% in January).
• Unemployment was 3.9%, and the participation rate was a little lower than expected at 62.5%, the number we’ve seen for three straight months now.

Today’s data came in on both sides of the fence…

But I feel we dodged a bullet as the headline number of jobs created blew past expectations. Why? I think we thank Fed Chairman Powell. Yesterday at the Senate, Federal Reserve Chair Jerome Powell suggested the central bank is getting close to the confidence it needs to start lowering interest rates, bolstering the idea that such a move could come in the next few months. He told lawmakers that rate reductions “can and will begin” this year, adding that policymakers are well aware of the risks of cutting too late. Powell’s comments sent benchmark 10-year Treasury yields to a one-month low. The Fed Chair also told Congress that the threat to the US banking system from mounting bad commercial real estate loans is manageable. He noted the Fed is talking with lenders to make sure they are on top of potential losses after the recent troubles at New York Community Bancorp, but dismissed the possibility of a risk to the overall system. After briefly converging on their outlook for interest-rate cuts, traders and the Federal Reserve are once again at odds. The former is leaning toward four quarter-point reductions versus the three laid out in the Fed’s dot plot.

I am always apolitical (at least in this forum)…

But I need to bring up last night’s state of the union speech at least how he impacted housing. President Biden with the dismal housing outlook weighing on family budgets, plans to help Americans obtain mortgages and to push down monthly rents. “I want to provide an annual tax credit that will give Americans $400 a month for the next two years as mortgage rates come down to put toward their mortgage when they buy a first home or trade up for a little more space,” he said. Additionally, Biden called on Congress to pass a mortgage relief credit that would provide first-time middle-class homebuyers an annual tax credit of about $5,000 for two years. This would effectively reduce the mortgage rate by more than 1.5 percentage points, the White House said, and will help more than 3.5 million middle-class families purchase their first home over the next two years. We don’t yet have any firm details on the programs to know whether they are viable but am skeptical these come to fruition.

Please remain safe and healthy, enjoy the weekend, first make today great!!!