Jobs Stall, Bonds Surge, and a QE4-Style Move? Why Mortgage Rates Just Hit a One-Year Low

Two major market movers hit on the same day, and together they explain why mortgage rates just dropped to the lowest levels we have seen in over a year.

First, jobs.

The latest jobs report showed only 50,000 jobs created last month, a miss of roughly 23,000 jobs versus expectations. While the unemployment rate did dip slightly to 4.4 percent, the headline number masked a much weaker trend underneath.

Revisions lowered October and November payrolls by a combined 76,000 jobs. Once those revisions are factored in, the labor market looks far less resilient than the initial headlines suggested.

After revisions, the U.S. has added only 87,000 jobs over the last six months, and about 584,000 jobs over the last twelve months.

That is an anemic pace by historical standards.

It represents the lowest amount of jobs created in a year since the COVID shock in 2020, and before that, you have to go back to 2008 and 2009 during the financial crisis to see numbers this weak. The labor market is not collapsing, but it is clearly losing momentum.

Bond markets reacted immediately. Mortgage-backed securities rallied sharply, gaining roughly 32 basis points, which pushed mortgage rates down to the lowest levels in over a year. This is a reminder that markets trade trends and revisions, not just headline numbers.

Job creation in historical context.

To understand why this slowdown matters, it helps to zoom out.

Below is a year-by-year snapshot of net U.S. job creation using nonfarm payroll data from theBureau of Labor Statistics

These figures reflect rounded annual net changes and incorporate commonly cited historical revisions. The numbers are approximate, but directionally accurate and useful for macro context.

Net U.S. Jobs Added or Lost by Year

Year Net Jobs

2000 +1.9 million

2001 −2.0 million

2002 −0.5 million

2003 +0.1 million

2004 +2.0 million

2005 +2.5 million

2006 +2.0 million

2007 +1.1 million

2008 −3.6 million

2009 −4.7 million

2010 +1.0 million

2011 +2.1 million

2012 +2.2 million

2013 +2.3 million

2014 +3.0 million

2015 +2.7 million

2016 +2.2 million

2017 +2.1 million

2018 +2.3 million

2019 +2.1 million

2020 −9.3 million

2021 +6.7 million

2022 +4.8 million

2023 +3.0 million

2024 ~+2.0 million (after revisions, slowing trend)

2025 YTD Modest growth, materially slower paceYear Net Jobs

2000 +1.9 million

2001 −2.0 million

2002 −0.5 million

2003 +0.1 million

2004 +2.0 million

2005 +2.5 million

2006 +2.0 million

2007 +1.1 million

2008 −3.6 million

2009 −4.7 million

2010 +1.0 million

2011 +2.1 million

2012 +2.2 million

2013 +2.3 million

2014 +3.0 million

2015 +2.7 million

2016 +2.2 million

2017 +2.1 million

2018 +2.3 million

2019 +2.1 million

2020 −9.3 million

2021 +6.7 million

2022 +4.8 million

2023 +3.0 million

2024 ~+2.0 million (after revisions, slowing trend)

2025 YTD Modest growth, materially slower pace

When you line this up with the current data, the message becomes clear. Outside of the pandemic collapse, job growth over the last year now ranks among the weakest periods of the past 25 years.

This historical context explains why bond markets reacted so forcefully. Slower job creation reduces inflation pressure and lowers the odds of sustained rate hikes. Mortgage bonds responded accordingly, and rates followed.

Second, bonds.

In a separate but related development,Donald TrumporderedFannie MaeandFreddie Macto purchase up to $200 billion in mortgage-backed securities.

The goal is simple: increase demand for mortgage bonds in hopes of driving mortgage rates lower.

Some have already labeled this QE4. That comparison is a stretch in terms of scale, as it is far smaller than previous rounds of quantitative easing. But the mechanism is similar. More demand for mortgage bonds supports higher MBS prices, and higher prices translate directly into lower mortgage rates, even if the Federal Reserve does not cut aggressively.

Markets will be watching closely to see how this develops and how quickly it is implemented.

The takeaway.

Slower job growth combined with potential government-backed demand for mortgage bonds is a powerful mix for rates. It does not mean mortgage rates will fall in a straight line, but it helps explain why rates are struggling to move higher and why they just touched the lowest levels in over a year.

This is also a reminder that opportunity often appears before confidence does. By the time the headlines feel comfortable, markets have usually already moved.

For buyers and homeowners, preparedness matters more than prediction. Knowing your numbers, options, and timing puts you in position to act when markets open a window, not after it closes.