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Mediocre Jobs Report, New Highs, Mortgage Rates, and Bad Sci Fi

  • Writer: Doug MacGray
    Doug MacGray
  • Jan 11
  • 4 min read

January 11, 2026 MEDIOCRE JOBS REPORT: The U.S. economy added 50,000 net new jobs in December. The average monthly increase for all of 2025 was 49,000 jobs. The monthly average for private sector jobs was 61,000 as government sector jobs declined. Federal government jobs decreased by 268,000 in 2025. The unemployment rate declined to 4.4%.

NEW HIGHS TO BEGIN THE YEAR: In the first full week of stock trading for 2026, the S&P 500 hit a new high. The jobs report was mediocre, but not bad enough to dampen confidence that this year looks good for a growing economy. Having a full year of lower interest rates and lower taxes are causing some of the optimism. Small-cap U.S. stocks, as measured by the Russell 2000, are up 5.75% for the year, nearly 4% higher than the S&P 500 and NASDAQ Composite fueling the notion that the "rotation trade" is continuing (investors rotating out of the giant and large cap stocks to cheaper small cap stocks). Buoyed by the administration's announcement regarding Fannie Mae and Freddie Mac purchasing mortgage-related securities, housing stocks are doing great. PulteGroup is up 12.74%, KB Home 9.22%, D.R. Horton 9.2%, and Toll Brothers 7.7%.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.


MORTGAGE RATES: The average rate for a 30-year mortgage in the U.S. topped out at about 7.8% in late October of 2023. Rates have moved around a bit since but generally in a downward direction. On January 9, 2025, they popped back up to 6.9%, but have been moving mostly down since to the current 6.16%. The Trump administration announced last week that Fannie Mae and Freddie Mac would purchase about $200 million in mortgage bonds in an effort to try to lower rates even more. Leading up to the financial crisis of 2008, both Freddie Mac and Fannie Mae owned more than $900 billion in mortgage-related investments. There was universal agreement across the political spectrum that this was too much. Right now, both entities are limited to owning $225 billion each. Currently, they hold a combined $247 billion meaning $200 billion would take them close to their legal limit. This would put downward pressure on mortgage rates.}


TRADE: Tariffs and other administration policies are definitely affecting trade. The trade deficit in October was down to $29.4 billion, down $18.8 billion from the prior month. October imports were $11 billion less than the prior month, and exports were $7.8 billon more than the prior month. The trend has been a smaller trade deficit. In the graph below you can see the trend, although there was a huge temporary jump in imports earlier in the year when companies were trying to act before anticipated tariffs.



NEW LAW MAY AFFECT OLDER AMERICANS TRYING TO SAVE FOR RETIREMENT: A new law went into effect on January 1. Since 2002, American workers aged 50 and older became eligible to make "catch up" contributions to a retirement plan. Under the SECURE 2.0 Act passed in 2022, if you are 50 or older, and you earned more than $150,000 last year (including retirement contributions), then your catch up contributions must be Roth contributions. This means the older worker cannot make pre-tax contributions to their retirement accounts using the catch up rules. If the worker's 401k plan does not offer Roth contributions, then that worker will not be allowed to make catch up contributions.


BAD SCI-FI: It was a weekend of bad sci-fi (one of my favorite genres). I traveled a short distance to a seminar that occurred on Friday. Deb and I were in an Inn on Thursday night (see below), and I scrolled around on the television and came upon the 1995 movie Piranha. It was great, cheesy plot, awful special effects and sound. It is a little gory, but quite fake. Then, over the weekend, I talked Deb into watching Robot Monster, the 1953 film where the monstrous Ro-Man tries to annihilate the last family alive on earth (spoiler alert, the robot monster falls for the family's beautiful daughter). With all that bad sci fi in me, I had to get one more in over the weekend, and after Deb had gone to bed, I stayed up and watched one of the most iconic and, to some, worst of all bad sci fi movies. Can you guess what it is from the images below?

INN AT FOX BRIAR FARM: And here is a shot of the place we stayed, the Inn at Fox Brian Farm, right across from Peddlers Village in Lahaska, Pennsylvania. This is a wonderful little place. We loved it.

Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

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(610) 628 4545

dmacgray@stonecropadvisors.com "The longer I live, the more I read, the more patiently I think, and the more anxiously I inquire, the less I seem to know...Do justly, love mercy, walk humbly. This is enough." John Adams


"[C]almness can lay great offenses to rest." Ecclesiastes 10:4


SOURCES:

NEW LAW MAY AFFECT OLDER AMERICANS TRYING TO SAVE FOR RETIREMENT: https://www.wsj.com/personal-finance/retirement/older-americans-making-catch-up-401-k-contributions-set-for-tax-hit-23770b97?mod=hp_featst_pos3 (c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.

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