Bonds Slide, Dollar Up After Jobs Report

Discussion in 'Economics' started by universaltrader, Apr 6, 2007.

  1. yahoo
    Friday April 6, 10:07 am ET
    By Tim Paradis, AP Business Writer
    Treasury Bond Prices Fall, Dollar Rises After Strong Jobs Report Fuels Optimism About Economy

    NEW YORK (AP) -- U.S. Treasury bond prices tumbled and yields rose in a holiday-shortened session Friday after the unemployment rate fell to a five-month low, signaling the economy could be stronger than expected.

    The yield on the benchmark 10-year Treasury note surged to 4.74 percent from 4.68 percent late Thursday. The bond market closes at 11 a.m. EDT for Good Friday; stock markets are closed.

    Word that the nation's unemployment rate fell to 4.4 percent in March rather than rose to 4.6 percent as expected sent the dollar sharply higher. Investors welcomed news that perhaps the economy is more robust than they had thought for much of this year. The dollar rose to 119.22 yen from 118.68 yen late Thursday while the euro slipped to $1.3379 from $1.3427.

    The Labor Department report that employers increased their payrolls by 180,000 in March, the largest increase since December. Wall Street had been expecting an addition of about 135,000 jobs. In another positive sign for consumers, workers' pay also increased. As consumer spending accounts for two-thirds of economic activity, investors are eager for consumers to continue to ring up purchases to help shepherd the economy to a so-called soft landing.

    Construction companies added jobs in March after cutting back in the prior month in part because of poor weather. Concerns about an unraveling of the housing sector have dogged investors in 2007. Recent troubles among so-called subprime lenders, which make loans to people with poor credit, have added to unease about the fate of consumers.

    While most of the world's stocks markets were closed for Good Friday or local holidays, Japan's Nikkei stock average fell 0.04 percent. The sometimes-volatile Shanghai Composite Index rose 0.13 percent to its fifth-straight record close. It was a nearly 9 percent drop in the Shanghai Composite Index on Feb. 27 that helped touch off a global sell-off. Major U.S. stock indexes lost more than 3 percent that day, though they have recently rebounded.
  2. 27,000, or over 1/2 of those construction jobs were added as an adjustment, not reported by employers...

    Same for 6,000 manufacturing jobs they are assuming were created but not reported. I'm sorry, but I find it hard to believe we are creating many new manufacturing businesses with the level of global competition out there anymore.

    You'll note that a total of 128,000 of the 180,000 jobs added came from the adjustment.