Mixed Data Leaves Rates Steady
With the lack of major economic data due to the government shutdown, investors continued to react to the reports from private companies last week. The services sector of the economy was stronger than expected, but the labor market displayed signs of softening. These results were roughly offsetting, and mortgage rates ended last week with little change.
ISM Reports Show Mixed Signals
Two significant economic reports released last week by the Institute of Supply Management revealed mixed results. The ISM national services sector index jumped to 52.4, far above the consensus forecast, while the national manufacturing index unexpectedly fell to just 48.7. Readings above 50 indicate an expansion in the sectors and below 50 a contraction. Service firms continue to outperform, but higher tariffs on foreign goods may provide a boost to domestic manufacturing companies over time.
Consumer Sentiment Drops Sharply
The latest survey on consumer sentiment published by the University of Michigan revealed that consumers remain quite concerned about the impact of higher tariffs and the government shutdown. The index dropped to just 50.3, far below the consensus forecast of 53.0 and the lowest level since June 2022 (which was the record low of 50.0). The component of the report on inflation expectations showed that the five-year average outlook unexpectedly fell, which was good news for mortgage markets.
Private Reports Show Labor Weakness
With the lack of government economic data during the shutdown, investors continue to look for alternative information from private companies. Two such reports released last week revealed concerning news about the labor market. First, layoffs soared in October, according to a large outplacement firm. Job cuts increased a massive 183% from September, the highest level for the month of October since 2003. This has been the worst year for layoffs since 2009. In addition, jobs site Indeed reported that job postings fell to the lowest level since February 2021 during the pandemic. Fewer postings suggest less competition for workers, meaning that companies are less likely to offer higher pay to attract additional employees. This reduces future inflationary pressures from wages, which is positive for mortgage markets.
Mortgage Rates for the week of 11-10-2025