by Calculated Risk on 12/11/2025 08:30:00 AM

The DOL reported:

In the week ending December 6, the advance figure for seasonally adjusted initial claims was 236,000, an increase of 44,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 191,000 to 192,000. The 4-week moving average was 216,750, an increase of 2,000 from the previous week's unrevised average of 214,750.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 216,750.

by Calculated Risk on 12/10/2025 07:26:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  There were 191,000 initial claims last week.

• Also at 8:30 AM, Trade Balance report for September from the Census Bureau. The consensus is the trade deficit to be $65.5 billion.  The U.S. trade deficit was at $59.6 billion in August.

• At 10:00 AM, the Q3 2025 Housing Vacancies and Homeownership from the Census Bureau.

• Also at 10:00 AM, State Employment and Unemployment (Monthly) for September 2025

by Calculated Risk on 12/10/2025 02:11:00 PM

Statement here.

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

Here are the projections.  

The BEA's estimate for first half 2025 GDP showed real growth at 1.6% annualized. Most estimates for Q3 GDP are around 3.5%. That would put the real growth for the first three quarters at 2.2% annualized - well above the top end of the September projections. The FOMC revised up Q4 2025 and Q4 2026 GDP growth.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Projection Date	2025	2026	2027	2028
Dec 2025	1.6 to 1.8	2.1 to 2.5	1.9 to 2.3	1.8 to 2.1
Sept 2025	1.4 to 1.7	1.7 to 2.1	1.8 to 2.0	1.7 to 2.0

¹ Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.4% in September. There was no data for October due to the government shutdown, and the November report will be released on December 16th - so the FOMC was flying blind today on the unemployment rate. However, they increased the 2026 projection into the employment recession range. Note: An unemployment rate of 4.6% over the next few months might be recessionary.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Projection Date	2025	2026	2027	2028
Dec 2025	4.5 to 4.6	4.3 to 4.4	4.2 to 4.3	4.0 to 4.3
Sept 2025	4.4 to 4.5	4.4 to 4.5	4.2 to 4.4	4.0 to 4.3

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of September 2025, PCE inflation increased 2.8 percent year-over-year (YoY), up from 2.7 percent YoY in August.  Projections for PCE inflation were lowered slightly.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Projection Date	2025	2026	2027	2028
Dec 2025	2.8 to 2.9	2.3-2.5	2.0 to 2.2	2.0
Sept 2025	2.9 to 3.0	2.4-2.7	2.0 to 2.2	2.0

PCE core inflation increased 2.8 percent YoY in September, down from 2.9 percent in August.   Projections for 2025 core PCE inflation were decreased.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Projection Date	2025	2026	2027	2028
Dec 2025	2.9 to 3.0	2.4-2.6	2.0 to 2.2	2.0
Sept 2025	3.0 to 3.2	2.5-2.7	2.0 to 2.2	2.0

by Calculated Risk on 12/10/2025 02:00:00 PM

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

FOMC Statement:

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.

In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting; and Austan D. Goolsbee and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting.
emphasis added

by Calculated Risk on 12/10/2025 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 4.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 5, 2025. Last week’s results included an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 49 percent compared with the previous week. The Refinance Index increased 14 percent from the previous week and was 88 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 32 percent compared with the previous week and was 19 percent higher than the same week one year ago.

“Compared to the prior week’s data, which included an adjustment for the Thanksgiving holiday, mortgage application activity increased last week, driven by an uptick in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Conventional refinance applications were up almost 8 percent and government refinances were up 24 percent as the FHA rate dipped to its lowest level since September 2024. Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower downpayment loans. Overall purchase applications continued to run ahead of 2024’s pace as broader housing inventory and affordability conditions improve gradually.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.33 percent from 6.32 percent, with points increasing to 0.60 from 0.58 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 19% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is still depressed, but solidly above the lows of 2023 and above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased from the bottom as mortgage rates declined, but is down from the recent peak in September.

by Calculated Risk on 12/09/2025 07:53:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 2:00 PM, FOMC Meeting Announcement. The Fed is expected to cut rates 25bp at this meeting.

• Also at 2:00 PM, FOMC Forecasts This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

• At 2:30 PM, Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

by Calculated Risk on 12/09/2025 02:07:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: More on the “Neutral” Interest Rate (R*)

A brief excerpt:

From housing economist Tom Lawler:

Executive Summary: Policymakers and financial analysts looking for “models” as a guide for assessing the neutral interest rate are faced with a dilemma: various models produce significantly different results, and it is far from clear which if any model is the “most” accurate. While it is perhaps interesting to note that the average R* estimate from various models available within the Federal Reserve System is currently very close to “market-based” estimates based on TIPS forward rates adjusted for term prema estimates, that may simply be a coincidence.

However, if one takes the approach that the “best guess” estimate of R* is found by looking at the average of various models and the “market’s” assessment of R*, one would come to the conclusion that the current “best guess” estimate of the neutral real rate of interest is very close to 1.5%,

If that is the case, and if, as expected, the FOMC decides to cut its federal funds rate target by 25 bp tomorrow, then the resulting level of the federal funds rate will be very close to the neutral nominal policy rate.

There is much more in the article.

by Calculated Risk on 12/09/2025 11:57:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in November

A brief excerpt:

Tracking local data gives an early look at what happened the previous month and also reveals regional differences in both sales and inventory.

November sales will be mostly for contracts signed in September and October, and mortgage rates averaged 6.35% in September and 6.25% in October (lower than for closed sales in October).

In November, sales in these early reporting markets were down 10.8% YoY. Last month, in October, these same markets were down 2.3% year-over-year Not Seasonally Adjusted (NSA).

Important: There was one fewer working days in November 2025 (18) as in November 2024 (19). So, the year-over-year change in the headline SA data will be more than the change in NSA data (there are other seasonal factors).
...
This was just several early reporting markets. Many more local markets to come!

There is much more in the article.

by Calculated Risk on 12/09/2025 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was unchanged at 7.7 million in October, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were little changed at 5.1 million. Within separations, both quits (2.9 million) and layoffs and discharges (1.9 million) were little changed.
emphasis added

The following graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for October; the employment report to be released this coming Tuesday will be for November.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.

Jobs openings increased in October to 7.67 million from 7.66 million in September.

The number of job openings (black) were up 1% year-over-year. 

Quits were down 9% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

by Calculated Risk on 12/08/2025 07:43:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Start Week Near 3 Month Highs

Both stocks and bonds lost ground on Monday. This pushed mortgage rates up near their highest levels in just over 3 months (because mortgages are based on bond prices). To put the 3-month highs in perspective, today's rates are right in line with those seen 2 weeks ago. [30 year fixed 6.36%]
emphasis added

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for November.

• At 10:00 AM, Job Openings and Labor Turnover Survey for October from the BLS.