Mortgage Hiring a Bust in April

Residential mortgage companies cut 5,500 full-time workers in April despite rising home sales and low mortgage rates. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell to 247,900 positions in April from 253,400 in March. The poor showing came amid reports of hiring by servicers in their loan modification units. But although the servicing sides of many firms are hiring (or at least not laying people off), production jobs are being cut because of weak loan demand, which could get even weaker now that two federal homebuyer tax credits have expired. Friday's job report also revealed that employment in the construction industry and commercial banking fell in May. (There is a one-month lag in BLS' reporting of mortgage banker/broker sector employment.) Construction jobs fell by 35,000 in May, offsetting gains in the prior two months. Commercial banks reduced their payrolls by 500 workers. Overall, Friday's jobs report was disappointing to analysts. Most of the 431,000 increase in jobs reflected the hiring of temporary government census workers. Only 41,000 of the new hires involved private sector jobs. The nation's unemployment rate edged down to 9.7% in May from 9.9% in April. Meanwhile, stocks tumbled early in the morning and the yield on the 10-year Treasury fell to 3.26%, once again nearing its 52-week low of 3.1%.