John’s Finance Corner: Slowing Jobs Data Sets the Stage for Rates This Week
Last week was expected to be a key jobs week, but a brief government shutdown delayed the highly anticipated Bureau of Labor Statistics (BLS) report, which is now scheduled for release this Wednesday. In the meantime, we did receive the latest ADP employment report for January, and the data continues to point toward a slowing labor market.
According to ADP, the private sector added just 22,000 jobs in January, less than half of the 48,000 expected. Hiring was flat among small businesses, while medium-sized firms drove gains with 41,000 new jobs. Large employers, however, cut 18,000 jobs during the month. Overall, private payroll growth remains weak, a trend that historically supports lower bond yields and mortgage rates.
Looking at the bigger picture, ADP noted that only 398,000 jobs were added in all of 2025, well below the 771,000 added in 2024. That puts average monthly job growth last year around 33,000, confirming a clear slowdown in hiring momentum. Wage growth still favors job switchers, with pay rising 6.4% year over year, compared with 4.5% for workers who stayed in their current roles.
On the housing front, Cotality’s latest Home Price Insights report showed national home values dipped just 0.2% in December. Despite the modest monthly decline, prices remain 0.9% higher than a year ago, only slightly softer than November’s 1% annual increase. Looking ahead, Cotality now forecasts home values will rise 4.5% over the next 12 months, supported by expectations of easing mortgage rates and continued pent-up buyer demand.
This week will be especially important for Treasury bonds and mortgage rates. Wednesday brings the delayed BLS jobs report. While this report is often viewed as volatile, current projections suggest the data could come in lower than expected, which would be supportive of bonds and rates.
We also receive the CPI inflation report on Friday. Based on replacement figures from this time last year and continued declines in rental costs, inflation appears positioned to cool more than forecasts suggest. If both the BLS jobs report and CPI inflation data come in weaker than expected, we could see bond yields and mortgage rates move lower into the end of the week, a positive development for both buyers and sellers.
As always, watching how the bond market reacts will be key in determining where rates head next. Every buyer’s situation is different, feel free to reach out if you’d like to discuss what these trends mean for you.
John Lamberg
MORTGAGE LOAN ORIGINATOR
NMLS 189233
