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Worker productivity declined in the second quarter and has fallen three straight quarters in a row, which could shackle worker pay and broader economic growth in the next few years. According to its latest survey, government sponsored entity Fannie Mae reported on Monday that consumers are feeling more confident about housing than ever before. The National Federation of Independent Business (NFIB) reported on Tuesday that small business optimism edged higher in July as it continues on its current winning streak.

The closely watched S&P 500 Stock Index closed at a record high of 2,182 on Friday due to optimism about economic growth here in the U.S. Late last week the Mortgage Bankers Association (MBA) reported that credit availability increased slightly in July. Gas prices at the pumps continued to edge lower over the weekend as a glut of oil supply runs through global pipelines.

The labor markets grew solidly in July after the strong numbers seen in June, signaling that the sector continues to add workers a robust clip. The U-6 number, or the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force, rose to 9.7% from 9.6%. Within the report it showed that average hourly earnings rose 0.3% versus the 0.2% expected, keeping the 12-month increase at 2.6%, a post-recession high.

Planned layoffs by employers rose from June to July with a big concentration in the energy sector. Americans filing for first-time unemployment benefits remained near 43-year lows, though claims did rise in the latest week. Freddie Mac reported that mortgage rates fell in the latest week and continue to hover near three-year lows.

Inflation pressures remained tame in June and below the Fed's target level. Consumer spending continued its winning streak in June as Americans spent on a range of goods and services. Data analytics firm CoreLogic reported on Tuesday that home prices, including distressed sales, rose 5.7% from June 2015 through June 2016, while prices rose 1.1% from May to June.

Americans filing for first-time unemployment benefits remained near 43-year lows, though claims did rise in the latest week. Freddie Mac reported that mortgage rates edged higher for the third week in a row to 3.48% for the 30-year fixed conventional rate ($417,000 or less) with 0.5 in points and fees. Gas prices across the nation continued to decline this week as the price of oil pushes lower.

Shares of Apple are surging today after the maker of the popular iPhone reported better-than-expected quarterly earnings after the Stock markets closed on Tuesday. Pending Home Sales edged higher in June, but below estimates due in part to the low supply of homes for sale and affordability constraints. Mortgage rates edged higher in the latest week, though still remain just above all-time lows, reports the Mortgage Bankers Association (MBA).

GE reported better-than-expected earnings on earnings-per-share and revenues, but other components declined. There is a zero percent chance of a hike to the short-term Fed Funds Rate at next week's Fed meeting, but the accompanying monetary policy statement may give some clues on future interest rate movements. The closely watched Gross Domestic Product (GDP) report will be released next week and comes after the weak 1.1% reading for the first quarter. The Atlanta Fed is forecasting 2.4% growth for 2016 for the second quarter.

Oil continues its slide down 48 cents to $37.17/barrel for West Texas Intermediate (WTI). 10-yr T Note yield at 2.21% from yesterday's close of 2.22%. The Treasury will sell a total of $58B in securities starting today with $24B 3-yr Notes. The 3.5% Fannie Mae 30-yr coupon able to overtake the first level of resistance at the 25-day Moving Average. USD Libor 1-month .28%, 3-month .47%, 6-month .71%, 12-month 1.04%. 

With the Jobs Report behind us, Mortgage Bonds are trying to stabilize. Carefully floating is recommended. WTI oil at $41.83/barrel up 75 cents. Non-farm Payrolls for November rise by 211K, above the 196K expected. September and October revised higher by a total of 29K. The Unemployment Rate remains at 5%, inline. The Labor Force Participation Rate 62.5%, just above the 62.4% in October. 10-yr T Note yield falls back to pre-data level of 2.31% from 2.35%. Fed Fund Futures show a near 80% chance of a rate hike at the December 15-16 meeting. Fed's Harker says the Fed will lose credibility without rate hike soon. 
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