Posted by: cfigueira | April 2, 2010

Employers added 162,000 non-farm payrolls in March

Employers added 162,000 non-farm payrolls in March,the government reported Friday. Both are signs that the U.S. recovery is finally gathering steam.

We have also been circumspect over the ability of low interest rates to keep things moving forward in perpetuity. To be sure, low rates matter and low mortgage rates make more homes more affordable to more people, but it’s still a matter of taking on new debt with a home purchase or lower-cost debt with a refinance. The only way debt can be serviced is with income, usually a job.

It’s really all about employment at this point. Fortunately, the news is improving on that front based on the past three months of employment data. When employment shifts into gear, interest rates are certain to follow.

It also tells us that when the news starts tilting toward more inflation and the Fed starts reconsidering its low-rate policy rates will move higher.

With that being said; the general outlook of the economy is reluctant to continue ‘beating at the dead horse’. So, we’ll continue to advise locking in at today’s low rates, because at this point only an unforeseen, extraordinary event will move them meaningfully lower. We doubt the same can be said for the other direction. Indeed, we think it will take little more than a whiff of inflation and a little equivocating on the Federal Reserve’s part to get rates moving north again.

MARCH BY THE NUMBERS:

-Transportation, warehousing, up 7,800.

-Professional and business services, up 11,000.

-Retail, up 14,900.

-Construction, up 15,000.

-Manufacturing, up 17,000.

-Leisure and hospitality, up 22,000.

-Health care, up 26,800.

-Government, up 39,000.

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