Greg Rutolo Loan Factory

Greg Rutolo 

Mortgage Broker | Refinance and HELOC Expert | Helping Homebuyers & Investors Secure Best Rates & Close Fast | DM Me for Your Free Rate Analysis | Licensed in NJ & PA | NMLS #34860

December 17, 2025

The jobs report is one of the most closely watched economic releases because it can quickly shift expectations for inflation, Federal Reserve policy, and ultimately mortgage rates.(see the generated image above) Even though it does not mention housing directly, it often triggers some of the biggest day-to-day moves in mortgage pricing.(see the generated image above)

What the jobs report includes

The monthly jobs report (often called the Employment Situation Report) usually highlights three key pieces of data:(see the generated image above)

• Payroll employment: How many jobs were added or lost in the economy.
• Unemployment rate: The share of people actively looking for work who cannot find a job.
• Wage growth: How quickly average hourly earnings are rising.

Each of these affects how investors view future inflation.(see the generated image above) Strong job gains and fast wage growth suggest consumers have money to spend, which can keep prices rising, while weak jobs and slower wages point toward cooling demand and less inflation pressure.(see the generated image above)

The link between jobs, the Fed, and rates

Mortgage rates are not set by the Fed, but the jobs report heavily influences what markets expect the Fed to do next with short‑term interest rates.(see the generated image above) When job growth is strong and unemployment is low, investors often assume the Fed will keep policy tight or delay cuts to prevent the economy from overheating.(see the generated image above)

Those expectations feed directly into longer‑term bond yields, especially the 10‑year Treasury, which is a major reference point for 30‑year fixed mortgage rates.(see the generated image above) If markets think the Fed will hold rates high for longer, yields on those bonds usually rise, and lenders tend to increase mortgage rates to maintain their returns.(see the generated image above)

How strong jobs data can lift mortgage rates

A stronger‑than‑expected jobs report can move mortgage rates higher in several ways:(see the generated image above)

• Investors price in a higher path for short‑term rates over time, raising yields on longer‑term bonds.
• Faster wage growth raises concerns that businesses will pass higher labor costs into prices, keeping inflation elevated.
• Demand for riskier assets (like stocks) may increase while demand for safe bonds falls, pushing bond yields up.

Since mortgage‑backed securities compete with Treasuries for investor demand, rising Treasury yields usually translate into higher mortgage rates for borrowers.(see the generated image above) It is common to see lenders reprice rate sheets intraday when a very strong jobs number is released.(see the generated image above)

How weak jobs data can ease mortgage rates

A weaker jobs report—disappointing job creation, rising unemployment, or slowing wage growth—sends the opposite signal.(see the generated image above) It suggests the economy is cooling, reducing the risk of persistent inflation and increasing the odds that the Fed will pause or cut rates sooner.(see the generated image above)

In that environment:(see the generated image above)

• Investors often move money into safer assets such as Treasuries, pushing those yields lower.
• Lower yields on Treasuries and mortgage‑backed securities reduce the returns investors require, allowing lenders to offer lower mortgage rates while still meeting their targets.

For homebuyers and homeowners, softer labor data can open a window where refinance opportunities improve or purchase affordability increases.(see the generated image above)

Why mortgage rate reactions can be confusing

The relationship is not always straightforward, because markets trade on expectations, not just the headline number.(see the generated image above) For example, if markets were forecasting extremely strong job growth and the report is “good but not great,” mortgage rates might actually move lower because the data is less hot than feared.(see the generated image above)

Similarly, revisions to prior months, details on labor force participation, and underlying wage trends can all shape market reaction.(see the generated image above) A headline that looks strong at first glance may be viewed as less threatening to inflation once investors dig into the details, leading to a more muted move in mortgage rates.(see the generated image above)

What this means for borrowers in practice

For borrowers, the jobs report is one of the key dates to watch on the economic calendar.(see the generated image above) Many lenders see their most volatile pricing days when this data is released, and rates can move meaningfully within hours.(see the generated image above)

Some practical implications:(see the generated image above)

• If you are close to closing and a strong jobs report is expected, locking before the release can protect you from a potential spike.
• If you have time and expect softer labor data or a cooling economy, it may be worth discussing with your loan professional whether to float and see if rates improve.
• For refinances, monitoring the trend in both jobs data and broader inflation reports helps identify windows where rates are more favorable.

The bigger picture for the housing market

Over time, sustained strength in the labor market supports housing demand, even if it keeps some upward pressure on rates.(see the generated image above) More people working and earning income means more households can consider buying, moving up, or investing in property.(see the generated image above)

Conversely, a very weak labor market might help reduce mortgage rates but can also undermine confidence and incomes, limiting how many people can actually take advantage of those lower rates.(see the generated image above) The most favorable backdrop for housing is often a “Goldilocks” labor market: jobs growth that is solid but not so hot that it keeps inflation and mortgage rates elevated.(see the generated image above)