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Where are the jobs?

By Polyana da Costa ·
Friday, April 6, 2012
Posted: 10 am ET

Think the economy is recovering because the job market has improved? Think again.

The employment report released today is disappointing, at best. The U.S. economy added only 120,000 jobs in March, half of what it added in February, the Labor Department says.

After three months of solid employment gains, the latest report shows the economy isn't growing as fast as many had expected. Economists thought today's report would show at least 200,000 new jobs.

The unemployment rate fell to 8.2 percent, the lowest since early 2009. Good news? Sure, but the rate is improving mostly because people have given up on looking for a job.

Investors normally get cold feet after a dismal jobs report like this, so they pull money of out riskier investments such as stock and seek safety in government bonds. As the demand for U.S. Treasury bonds increases, the yield, or rate of return on those bonds, falls. And then like magic, mortgage rates fall -- sometimes.

The 10-year Treasury yield hasn't dropped yet because stock markets around the world are closed for Good Friday. But Freddie Mac's required net yield, which also is an indication of where rates are headed, dropped from 3.49 to 3.40 as soon as the jobs report came out this morning.

Remember, mortgage rates don’t always do what they are supposed to, but I think we'll see lower mortgage rates next week.

Follow me on Twitter @Polyanad

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