Triangle Business Today

March jobs report shocks bond market

Posted April 6, 2012 12:16 p.m. EDT

As I mentioned Thursday, any deviation from consensus estimate on the jobs report could have provided volatility for Friday.

We saw exactly that in a remarkable turn of events from recent job reports as bonds were sent heading towards the ocean floor on news that the jobs report came in at almost half of what economists were expecting for March. 120,000 new jobs were added last month which is quite a contrast to the three previous months in which the economy added more than 200,000 jobs each month.

The overall unemployment rate actually fell in March to 8.2 percent. This disappointing jobs report will be interesting data for the Fed to consider during their next meeting which is scheduled for April 24-25.

Investors headed for the safety of bonds after the report, and as money flowed in bond prices shot through the roof and yields dropped significantly, with the 10 year yield going from 2.19 at Thursday's close to 2.05 by the close of the bond market at noon on Friday.

This is very good news for all of us in Triangle housing as it now puts significant downward pressure on mortgage rates, and perhaps lends more credibility to the potential of an easing move by the Fed. Lower mortgage rates means that homes are less expensive to purchase from a credit perspective and it opens the doors for a greater number of potential homeowners to either purchase or refinance in the Triangle housing market.

Have a wonderful Easter Weekend!

About this Blog:

Jeremy Salemson, CEO of Corporate Investors Mortgage Group, blogs about economic trends and data and their impact on Triangle business. Each week, he interviews a Triangle-area business leader for a personal look at the local economy.