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Payrolls Recover From February As Yields Rise

Yields rose across the curve this week amid a series of mixed economic releases.  Positive data on constructions spending, jobs growth, and vehicle sales were offset by lackluster reports on manufacturing employment, retail sales and non-manufacturing PMI.  Bond yields were also supported throughout the week by higher stock prices, as the S&P 500 headed towards a weekly advance of nearly 2%. 

Friday's jobs report capped off the week, as the 196k job growth in March outpaced expectations.  February's unexpectedly weak 20k job gain was also revised upwards to 33k.  Despite the payrolls growth, other details of the report were mixed, as earnings growth fell short of expectations while the labor force participation rate declined.  However, the decline in the participation rate was chalked up to the retirement of older workers.  And despite the weak earning growth, the annualized growth rate of hourly earnings remained above 3% for the eighth consecutive month.

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