March Jobs Report

March jobs numbers just came out and the economy gained 162,000 jobs.

Employment in the U.S. increased in March by the most in three years and the unemployment rate held at 9.7 percent as companies gained confidence the economic recovery will be sustained.

Payrolls rose by 162,000 last month, less than anticipated, after a revised 14,000 decrease in February that was smaller than initially estimated, figures from the Labor Department in Washington showed today. The increase included 48,000 temporary workers hired by the government to help conduct the 2010 census. Average hourly earnings fell and hours worked rose.

There were only 48,000 census workers hired in March. That was about half of what the consensus expected and that contributed to much of the less than expected number. The market expected near 200,000. The revisions were also improved in February and January. The average hours went up slightly while wages were down slightly. Finally, the unemployment rate stayed the same which indicates that more people are getting back to looking for work.

The key story going forward will be the economy's reaction to the Fed's ending of their buyback program. The ten year U.S. Treasury bond is hovering near 3.90%. That's up half a percent in the last couple weeks. Mortgage rates have risen in a similar fashion.

So, how high will both of these go now that the Fed won't be buying these bonds? No one knows but over the next few months the full effect of massive debt will be felt on treasury and mortgage rates. Housing was sputtering with the thirty year near 5%. What will happen with rates at 6 or even 7%?

Still, the trajectory of jobs is good here. Now, there needs to be continuing increase in strength. The economy needs to add 300,000 jobs consistently for months before there's a jobs recovery. That hasn't happened quite yet and we'll wait for April to see if it does.