Jobs Report Looms as Mortgage Rates Hover Near Lows

U.S. mortgage rates inched higher this week, but they are still hovering near the best levels borrowers have seen since late 2024. Freddie Mac’s weekly survey showed the average 30-year fixed rate at 6.16%, up a hair from 6.15% last week and down from 6.93% a year ago, according to Freddie Mac data.

The catalyst was a modest bond selloff Thursday after a stronger weekly Jobless Claims print and broader overnight weakness in global government bonds. Mortgage rates typically track the 10-year Treasury yield as a benchmark for long-term borrowing costs. Midday Thursday, the 10-year was around 4.17%, a level that still keeps mortgage rates contained but vulnerable to data surprises, as noted in bond-market moves.

Rates on shorter maturities moved similarly. The 15-year fixed rate rose to 5.46% from 5.44% last week, and remains well below 6.14% a year ago, per the same survey. Bankrate’s broader lender snapshot has the 30-year at 6.24% and the 15-year at 5.54%, highlighting that the “headline” rate borrowers see can vary by methodology, points, and lender mix, according to Bankrate’s table.

Immediate impact: purchase affordability improves at the margin, but the next 24 hours matter more than the last 24 days. Friday morning’s U.S. jobs report can quickly reset Treasury yields, which then reprice mortgage rate sheets within hours, as explained by Friday’s volatility risk.

For readers, the playbook is simple. If you’re shopping or refinancing, be ready to lock quickly after the jobs data because even a small yield jump from 4.17% can undo the recent drift toward the low 6% mortgage range.

The U.S. labor market is sending a mixed message heading into Friday’s official Employment Situation report. On the surface, payrolls are still growing, but under the hood, more workers are worried about job security and higher-paying white-collar roles remain under pressure. The key near-term question is whether Friday’s government data confirms the “low fire, low-hire” stall that has been building since mid-2025, as described by Marketplace’s report.

The catalyst this week was a string of labor indicators ahead of the Bureau of Labor Statistics release on Jan. 9. ADP reported private employers added 41,000 jobs in December, a modest rebound in a 159.5 million-job economy, with hiring concentrated in steadier service categories rather than cyclical corporate functions, according to the ADP context. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed openings falling to a more-than-one-year low in November, reinforcing the sense of a frozen job market where people stay put because switching jobs is harder.

Confidence is the bridge from labor data to consumer spending. University of Michigan survey evidence shows more households expecting unemployment to worsen, and that deterioration is notable even among high-income earners, who have been driving spending but are increasingly reacting to layoff headlines in the tech-heavy “knowledge economy,” per job-security worries. One stark pressure point: Black unemployment rose to 8.3% in November from 7.5% in September, compared with an overall unemployment increase of only 0.4%, as cited in the demographic breakdown.

Likely next steps center on how markets and the Fed interpret the composition of hiring. A headline that looks “fine” paired with weakening confidence can still cool discretionary spending and eventually inflation, which would revive the case for rate cuts later in 2026. If Friday’s payrolls surprise strong, mortgage and bond yields could jump quickly, tightening financial conditions even without Fed action, as highlighted by rate sensitivity to jobs.

For readers, the practical implication is that labor market risk is shifting from layoffs to opportunity. If you’re hiring or job hunting, watch openings and confidence as closely as payroll totals because they’re better real-time signals of wage leverage and mobility.

China’s inflation picture sharpened in December. Consumer prices rose at the fastest pace in nearly three years, but factory-gate prices stayed in deflation, underscoring an economy where household spending is improving around holidays while underlying demand and pricing power remain weak. December CPI rose 0.8% year over year, while PPI fell 1.9% year over year, according to National Bureau of Statistics data.

The catalyst was a mix of seasonal food dynamics and policy support that has not yet translated into broad-based demand. Fresh vegetable prices surged 18.2% year over year due to winter supply shortages, while pork prices fell 14.6%, a split that helped lift headline CPI without signaling a true demand boom, as detailed in the food breakdown. Core CPI, which strips out food and energy, ran at 1.2%, and CPI rose 0.2% month over month.

Why it matters now: Beijing is trying to escape a multi-year deflation trap without reigniting property excess. Even with December’s pickup, China’s CPI for 2025 was flat, missing the official target of “around 2%,” suggesting stimulus to date has been too incremental to change household behavior or private investment. At the same time, PPI has now been negative for more than three years, reflecting overcapacity, price wars, and weak end-demand that compress corporate profits and hiring.

Immediate impact showed up in markets as a small relief rally. Chinese equities posted mild gains after the print, with the CSI 300 up about 0.1% and the Shanghai Composite up about 0.4%, while the yuan steadied near its strongest level in roughly 2.5 years, according to market reaction notes.

For readers, the key takeaway is that China is not “reflating” in a clean, demand-led way. Watch whether core inflation accelerates above 1.2% and whether PPI’s -1.9% improves further. That combination would be a stronger signal for global cyclicals and commodity demand than a food-driven CPI bounce.

• Friday’s jobs report volatility. A surprise can reprice mortgages the same morning.
• Freddie Mac 30-year average at 6.16%. Watch whether it breaks sustainably toward 6.0% or reverses.
• Worker sentiment from Michigan surveys. Confidence erosion can hit spending even if payrolls hold up.
• China inflation mix. Track whether core CPI at 1.2% rises and PPI deflation keeps easing.
• Trade noise. The October U.S. deficit at $29.4B was distorted by gold and pharma swings. Watch for normalization.