September Rate Hike Increasingly Unlikely After This Week’s Jobs Report - Redfin Real Estate News

September Rate Hike Increasingly Unlikely After This Week’s Jobs Report


The August jobs report keeps the probability of the Fed hiking interest rates in September very low. That could be promising for homebuyers watching for mortgage rates to come down.

This week’s jobs report is seemingly weak at first blush, but it’s actually fairly good news for homebuyers waiting for mortgage rates to come down. The U.S. added 187,000 jobs in August, in line with expectations. Unemployment jumped significantly, from 3.5% in July to 3.8% in August. That may alarm people, but the jump is mostly due to more people looking for jobs, not more people losing their jobs. 

Wage gains slowed, with average hourly earnings up 0.2% from a month earlier and 4.3% from a year earlier. That’s slightly weaker than expected, and a sign that the labor market is gradually cooling, which is one goal the Fed was trying to accomplish by hiking interest rates. Combined with weak JOLTS data released earlier this week, this has the potential to bring down interest rates–and mortgage rates–but it doesn’t necessarily mean the U.S. is headed toward a recession. 

There’s a very low probability of the Fed hiking rates at their September 20 meeting, and this jobs news should keep that probability low. The Fed will also take into account the August CPI report, which will be released September 13. 

Chen Zhao

Chen Zhao

Chen Zhao leads the economics team at Redfin, where she produces research on the housing market for public and internal audiences. Previously, she was an executive director leading housing finance and financial markets research at the JPMorgan Chase Institute. Prior to joining JPMCI, Chen was an economics consultant at Analysis Group, Inc., where she worked on financial litigation cases and led teams conducting health economics and outcomes research on behalf of pharmaceutical companies. While in graduate school, Chen was with the Center for Economic Studies and the Social Economic and Housing Statistics Division at the US Census Bureau, where she conducted applied microeconomics research using large scale restricted-access linked survey-administrative data. She started her career at the White House Council of Economic Advisers, where she focused on labor and health economics.

Email Chen

Be the first to see the latest real estate news:

  • This field is for validation purposes and should be left unchanged.

By submitting your email you agree to Redfin’s Terms of Use and Privacy Policy

Scroll to Top