Episode summary
What to make of the negative labor data
HousingWire Daily
· · 17 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
The episode argues that the latest run of weak labor data is pushing the 10-year Treasury yield and mortgage rates lower, even before the official BLS jobs report. Logan Mohtashami says the ADP miss, spike in jobless claims, soft job openings, and negative Revlio print all point to a labor market that is softer but not breaking. He argues that this distinction matters because the Fed is focused on inflation above target and on claims, not on headlines about layoffs or one weak data point.
Mohtashami says the market is behaving normally for this cycle: when labor cools, money flows into bonds, yields fall, and mortgage rates drift down toward what he sees as a neutral range. He says the recent move into the low 6% mortgage rate area looks properly priced unless labor data reaccelerates materially. The host presses on whether the market is overreacting, but Mohtashami says the Fed has been consistent in waiting for clearer labor deterioration before cutting aggressively.
He also connects the housing sector to the broader argument, saying construction and manufacturing jobs have been losing momentum and housing starts and permits are not reaccelerating. That makes housing a weak spot, but not enough by itself to force a major Fed pivot. His view is that rates can stay relatively stable for now, and that the real catalyst for meaningfully lower rates would be a genuine labor-market break.
Key takeaways
- Mohtashami says the week’s labor reports all pointed in the same direction: softer labor data, lower yields, and lower mortgage rates.
- He argues the Fed will not move aggressively unless jobless claims or broader hiring data show the labor market is truly breaking.
- He says mortgage rates around 6.17% and a 10-year yield near 4.21% look like a normal lower-end range for this cycle.
- He expects rates to rise meaningfully only if labor data reaccelerates and pushes the 10-year yield toward 4.40% to 4.60%.
- He says housing remains weak, especially in construction and manufacturing jobs, but not weak enough to force a major policy shift yet.
Notable quotes
“whenever the labor data gets weak 10ear yield just uh uh drops”
“The housing market data really revolves around the 10-year yield, just like the slow dance, how we always talk about the slow dance with the 30-year mortgage rate”
“You have the lowest job growth in the 21st century. But you don't have big fires yet”
“It's softer but it's not breaking”
“the only way I have the 10-year yield getting up to 440 or 460 is that the labor data has to reacelerate”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moto Shami to talk about the negative jobs data we got this week and how that's impacting rates. As always, I want to thank our sponsor Trust and Will for making this episode possible.
Logan, welcome back to the podcast. It is wonderful to be here and of course you know yesterday we talked about jobs week and previewing it and technically jobs week is over right uh we're going to get the BLS jobs report uh next week but again to me you know we have all this talk about growth and inflation and Kevin Worsh and anything but whenever the labor data gets weak 10ear yield just uh uh drops And and this is Thursday morning and I think this is a good good test case of of how to explain like you know for me personally after 2010 after qualified mortgage came into play which values the mortgage buyer a little bit more with credence because uh um you know qualified mortgage made sure that everyone's legit. The housing market data really revolves around the 10-year yield, just like the slow dance, how we always talk about the slow dance with the 30-year mortgage rate, but because the qualified mortgage was put in, it really puts a little bit more emphasis uh on mortgage demand being the big driver.
But even though we didn't have jobs weak fully, let's review every single one. ADP report, weaker than estimates. Uh the jobless claims data spiked.
I would say that's the winter storm because it's majority coming from uh places where uh winter was very heavy and people were kind of blocked in their house. Um number three, the job openings, the headline job openings data missed the estimates by a lot, but the internals were just mostly the same.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- negative jobs data
- mortgage rates
- labor market
- interest rates
- housing market
Watch the episode
Watch “What to make of the negative labor data” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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