3 Min. Market Summary
08/07/2026

Jobs Turn Negative Helping Mortgage Rates Retreat From Their Peak

It was another up-and-down week for mortgage rates. We got a little relief early on as hopes grew for a deal to reopen the Strait of Hormuz. But that didn’t last long. Conflicting reports from the U.S. and Iran quickly cooled those hopes, and rates started moving higher again.

By Thursday, mortgage rates hit 6.69%, their highest level of the year and slightly above where they were this time last year. The war with Iran and higher oil prices continue to put upward pressure on rates.

Then Friday’s jobs report gave us some good news for rates. The economy lost 23,000 jobs in July when 80,000 new jobs were expected. On top of that, May and June were revised down by another 103,000 jobs. That was a pretty clear sign the job market is slowing, which lowered the chances of another Fed rate hike and helped rates move back down.

Next week, inflation takes center stage. If those numbers show inflation cooling, we could see rates get some more room to improve even more.

Keep reading for a full breakdown of this week’s market-moving news:

Labor Market (Jobs)

Bureau of Labor Statistics (BLS) July Jobs Report

• The economy lost 23,000 jobs in July versus expectations for an 80,000 gain.
• May and June payrolls were revised lower by a combined 103,000 jobs.
• May payrolls are now estimated at 63,000, down sharply from the original report of 172,000.
• June was revised from 57,000 jobs to just 20,000.
• Leisure and Hospitality lost 40,000 jobs, Retail Trade lost 19,000, and Local Government Education lost 50,000.
• Private Education and Health Services remained one of the few areas of strength, adding 25,000 jobs.
• The unemployment rate fell from 4.2% to 4.1%, but the drop was driven by people leaving the labor force rather than stronger hiring.
• The Household Survey showed 87,000 jobs lost while 264,000 people left the labor force.
• Since May, roughly 700,000 jobs have been lost in the Household Survey while around 1 million people have left the labor force.
• Full-time employment fell by 106,000 while part-time employment increased by 138,000.
• The broader U-6 unemployment rate held at 7.9%.

ADP Employment Report

• ADP reported 44,000 private-sector jobs added in July, below expectations for 70,000.
• The prior month’s gain was revised slightly lower from 98,000 to 95,000.
• Education and Health Services accounted for 36,000 of the jobs added.
• Leisure and Hospitality lost 11,000 jobs as temporary World Cup hiring faded.
• Workers staying in their jobs saw wages rise 4.4% year over year, while job switchers saw a 7% increase.

Job Openings and Labor Turnover Survey (JOLTS)

• June job openings fell by 178,000 to 7.359 million, slightly below expectations.
• Healthcare openings fell by 147,000, which is notable because healthcare has been one of the main sources of job growth.
• The hiring rate edged up to 3.4% but remains near historically weak levels outside of the pandemic.
• The quits rate was 2%, another sign workers aren’t seeing as many opportunities to move between employers.

Revelio, Institute for Supply Management, ZipRecruiter and Jobless Claims

• Revelio estimated 79,000 jobs were created in July, including 28,000 in healthcare.
• The Institute for Supply Management services employment index fell from 51.2 to 47.4, putting employment back into contraction territory.
• ZipRecruiter described the labor market as subdued and pointed to hires and quits near 15-year lows.
• Initial Jobless Claims remained low at roughly 199,000, showing employers still aren’t laying off workers aggressively.
• Continuing Claims increased by 24,000 to 1.8 million.

Inflation

Wages and Labor Costs

• Average hourly earnings increased just 0.05% in July, below expectations.
• Annual wage growth slowed from 3.4% to 3.2%.
• Average weekly earnings slowed from 3.8% to 3.5%, showing little evidence of wage-driven inflation.

Productivity and Unit Labor Costs

• Second-quarter productivity increased 1.4%, well above the 0.6% expected.
• First-quarter productivity was also revised 0.5% higher.
• Unit labor costs increased just 1.3%, which was 0.8 percentage points below expectations.
• First-quarter labor costs were revised another 0.5% lower.
• Stronger productivity paired with softer labor costs is a positive sign for the inflation outlook.

Shelter and Energy

• Treasury Secretary Scott Bessent said he expects underlying inflation to continue moving lower as rent growth cools.
• Camden Property Trust reported new rents fell 3.3%, renewal rents rose 2.8%, and blended rents declined 0.2%.
• Shelter inflation in the Consumer Price Index was still running at 2.8% year over year, leaving room for additional cooling.
• Oil remained an important wildcard as developments around Iran and the Strait of Hormuz caused prices to move sharply during the week.

Economic Reports and Forecasts

Mortgage Rates

• The average 30-year fixed mortgage rate reached 6.69% on August 6, its highest level of 2026.
• That also briefly put rates above the 6.63% level from the same week in August 2025
• Rates began retreating after Friday’s much weaker than expected jobs report.
• Earlier Mortgage Bankers Association data showed rates around 6.8%, with purchase applications down 3% and refinance applications down 9% from a year earlier.

Next Week

• The Consumer Price Index is due Wednesday and will be one of the biggest reports to watch for the direction of rates.
• The Producer Price Index follows Thursday.
• Existing Home Sales, mortgage applications, Jobless Claims and Retail Sales are also scheduled.
• A 10-year Treasury auction Wednesday could also influence bond yields and mortgage pricing.

Federal Reserve and Monetary Policy

Fed Rate Outlook

• Three Federal Reserve members voted for a 25 basis point rate hike at the last meeting, partly because they believed the labor market remained strong.
• This week’s labor data, capped by an outright decline in July payrolls, makes that argument harder to support.
• Following Friday’s jobs report, the odds of a September rate hike fell.
• Philadelphia Federal Reserve President Anna Paulson said she believes the current federal funds rate is restrictive enough to bring inflation back toward target.
• Paulson estimates underlying inflation, excluding energy shocks, tariffs and other temporary factors, at roughly 2.4% to 2.8%.

Other

Middle East and Oil

• Oil prices moved lower early in the week on another round of hope for a temporary reopening of the Strait of Hormuz and renewed talks involving the United States, Iran and Oman.
• Later developments complicated those hopes when a proposed passage reportedly excluded U.S. and Israeli transit, pushing oil prices higher again.
• Oil remains important for mortgage rates because another sustained energy spike could keep inflation concerns elevated.