Meant to post this Friday.
March payrolls hit the skids for another 663K job losses while the unemployment rate jumped to 8.5%, a 25 year high. January figures raised the most eyebrows as revisions pushed job losses to 741K, the largest one month decline since October 1949. Jobs were shed in all sectors of the economy except education and health care which rose by 8K. Manufacturing once again took the largest hit, down 161K for the month. Average hourly earnings rose .02% and the average work week fell to 33.2 hours, rounding out the numbers. Overall, the release was close to expectation outside of the January revision and slightly higher unemployment rate. With the employment picture being a lagging indicator, we will continue to see deterioration (possible as high as 9.5% unemployment) yet stocks and other markets will improve due to their looking forward perspective. Non-manufacturing ISM (Institute for Supply Management) just released their non-factory business index. The 40.8 print was well below expectations of 42.0. With last month’s reading at 41.6, it’s easy to see the last of activity in the economy. Technically speaking, yesterday formed a outside day down (bearish) on the hourly 10 year note chart. The break of the hourly trend line points to a measure move to yield 2.82%, right where we are now. With the 10 year note back into the center of the range, a sideways to slightly bullish trade should develop. Currently, the 10 year is off 20/32’s (yield 2.82%), mortgage backs off 6/32’s, and stocks off 60 points on the big board. Mortgage pricing worse, stock prices worse. Just glad it’s Friday. Look for improvement into next week when the Fed is back in the market (buying our MBS). Have a great weekend.