The dismal jobs report released this morning is a painful reality check for those who thought the economy was ready to take off.
Employers added only 88,000 new jobs in March, according to the Labor Department. That's less than half of what economists had expected and the fewest number of jobs gained in nine months. A silver lining: February's payrolls were revised up to 268,000 jobs, up from the originally reported 236,000.
The unemployment rate ticked down to 7.6 percent, but that's not reason for celebration. The rate fell only because nearly 500,000 people gave up on finding a job.
Why are the numbers so depressing?
Economists had anticipated somewhat of a slower pace in hiring as employers and consumers are starting to feel the impact of the payroll tax increase that went into effect in January.
But this report was "much worse than expected," says Nigel Gault, chief U.S. economist for IHS Global Insight.
"There were disappointments almost across the board, especially in manufacturing and retail trade, which both saw job losses," he says. "The three-month moving average of job creation has now dropped to just 168,000 -- it had previously been running above 200,000."
At least one reason to celebrate
There's a bright side to this brutal jobs report. Disappointed and concerned investors will likely push mortgage rates down this week as they dump stocks for safer investments, such as Treasury and mortgage bonds.
So far this morning, the bad news has pushed the yield on Fannie Mae's 30-day note to 3.05 percent from 3.13. The yield on the 10-year Treasury note fell to 1.7 from 1.76 percent. Mortgage rates tend to follow the same direction as Fannie and Treasury note yields.
If you are shopping for a mortgage this week, enjoy the superlow rates and thank the lousy economy.
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