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MBS Day Ahead: Market of Two Minds After Ho-Hum Jobs Report

Posted To: MBS Commentary

The reaction has been back-and-forth in a very narrow range, but with very typical volume for NFP (in other words, traders are clearly trading… they're just conflicted). Why the conflict? Sure, at 559k vs 650k f'cast, the number was weaker than expected, but it was nonetheless a big step up from last month's 278k. By the time we consider seasonal distortions, the data is actually fairly strong. MBA Chief Economist Mike Fratantoni shared a good observation about the NSA (not seasonally adjusted) numbers, saying "in both April and May, the monthly NSA increase was closer to 1 million. The seasonal adjustment is likely significantly complicated by the huge swings in employment over the past year. The NSA changes may be reflecting stronger underlying growth than the headline…(read more)

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