Employment Situation
This morning’s major economic news was the release of March’s Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate slipped to 4.3% last month from February’s 4.4% when analysts were expecting it to be unchanged. The bigger surprise came in the payroll number that jumped to 178,000, greatly exceeding forecasts of 55,000. There were noticeable revisions to both February and January’s job numbers that netted 7,000 fewer jobs year-to-date than previously announced, but March’s unexpected number is significant. The combination of a lower unemployment rate and large number of new payrolls added to the economy certainly erases some justification for the Fed to lower key rates in the near future, even though analysts are not expecting the coming months to show similar results. Accordingly, these readings are clearly bad news for bonds and mortgage rates.