“IT’S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB; IT’S A DEPRESSION WHEN YOU LOSE YOURS.” Harry S. Truman. The big headlines of the week had everything to do with job losses…and some surprising twists within the monthly Jobs Report that arrived on Friday, and caused home loan rates to worsen yet once again. Despite their efforts to improve early in the week, Bonds and rates ended the week .375% to .5% worse than where they began.

Friday’s Jobs Report showed that 345,000 jobs were lost in May, far better than expectations for 520,000 jobs lost. And adding to the positive tone were revisions to the two prior months, showing 82,000 fewer jobs lost than previously reported. So all in all, about 260,000 fewer jobs lost than had been forecast.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. Bonds have traded lower recently, causing home loan rates to move higher. The reasons are many, but certainly due in part to all the extra Bond supply in the market. The Treasury has to have some way to pay for all the massive government stimulus plans, so Treasury auctions have been increasing dramatically – but the added supply is driving prices lower, with home loan rates moving higher. I will be watching closely to see if this trend continues.