by Calculated Risk on 9/11/2013 07:19:00 PM

Early this morning, the MBA mortgage application survey was released showing a 71% decline in refinance applications since early May (purchase applications are down 13% over the same period, but still up year-over-year). It appears the refinance boom is over. From CNBC: Rates rising, banks hit the brakes on mortgage business

JPMorgan laid off more than 2,000 employees in early August—about half of them in originations, according to a person familiar with the situation. ... The August round of layoffs represented the first time the bank had moved to downsize its origination business, which surged as mortgage rates went to historic lows.

Other Wall Street banks are making similar moves, as a sharp rise in rates has kept consumers from taking out or refinancing mortgages.

Late last month, Bank of America notified 2,100 employees that their jobs were being cut; Wells Fargo has laid off more than 3,000 since July. Citigroup confirmed Wednesday the July closure of an office in Danville, Ill., that affected 120 jobs.

Most mortgage applications this year have been for refis (the refinance share was 76% of total applications in early May), and most of that business is going away.  And so are the jobs.

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 330 thousand from 323 thousand last week.

• At 2:00 PM, the Monthly Treasury Statement for August. The CBO has already released their Monthly Budget Review for August 2013 showing a monthly deficit of $146 billion in August, and a year-to-date deficit of $750 through August (the fiscal year ends in September, and there will be a large surplus in September since quarterly estimated payments are due in mid-September. The annual deficit for fiscal 2013 should be around $650 billion or 4% of GDP, down sharply from 7.0% of GDP in fiscal 2012.