Market commentary

In a downside surprise to elevated expectations, the U.S. economy added 103k total jobs in December according to the nonfarm payroll report. Revisions added 70k to October and November’s figures. Private payrolls rose 113k, well below the expected increase of 178k

The unemployment rate fell from 9.8% to 9.4%, which on the surface does not make sense given the slack job creation. Keep in mind this is a separate compilation from jobs creation, in that this is a survey of households.

Fed Chairman Bernanke testified before the Senate Budget Committee this morning and defended the Fed’s QE2 program while chiding Congress on its inability to maintain fiscal discipline.

The U.S. Treasury market reacted favorably to the weaker than expected jobs data with the yield on the 10 year note falling from 3.41% at the open to 3.34%.