Jobs Number Beats Expectations, Interest Rates Soar

Friday morning's BLS employment report showed job growth exceeding expectations, as the 280,000 increase in non-farm payrolls beat the consensus forecast for 226,000. The unemployment rate did weaken slightly to 5.5 percent versus estimates of 5.4 percent, with the labor force participation rate rising to 62.9 percent. Hourly wages increased by 0.3 percent, above the consensus estimates of 0.2 percent, according to Bloomberg. The U-6 unemployment rate, which counts those working part-time for economic reasons and the unemployed who have not looked for work in the past month, came in at 10.8 percent, in-line with expectations. The average work week was unchanged at 34.5 hours, while wages rose $0.08 per hour to an annualized rate of 2.3 percent. Both stock and bond futures slumped following the news, with the strong jobs number raising the likelihood of the Federal Reserve raising rates sooner than later. St. Louis Fed President James Bullard hinted at that earlier in the week, saying he expected the economy to improve enough to justify a rate increase this year. Stock futures were down by 0.40 percent, while the yield on the 10-year treasury moved sharply higher, firmly back above 2.4 percent.