The markets received an unexpected jolt this morning with a surprisingly weak jobs report. There is no silver lining to June’s employment reports as total payrolls for the month grew at just 18,000, including 57,000 of new private sector jobs and a loss of 39,000 government jobs. Expectations were for 105,000 total payroll growth and 132,000 private sector job growth. U.S. Treasuries rallied strongly on the weak data with the yield on the 10 year note gapping from 3.18% to 3.04%.
In the household report, the unemployment rate rose to 9.2% but the report is worse than that. Not only did the number of employed persons fall a massive 445,000, but 272,000 people completely left the labor force.
For those fiscal conservatives it is almost time to say I told you so---meaning, excessive government regulation, massive deficit spending and the printing of money does not make a sound economic recovery.
Mortgage bonds are being dragged along by treasuries, with pricing better by .375% to .50%.
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