I will get to my usual jobs report shortly, but first I want to point out some revisions by the BLS.

“The total nonfarm employment level for March 2010 was revised downward by 378,000 (411,000 on a seasonally adjusted basis). The previously published level for December 2010 was revised downward by 452,000 (483,000 on a seasonally adjusted basis).”

It’s pretty tough to blame those revisions on the weather, but they did blame today’s jobs number (a mere +36,000) on the weather. I will slog through the BLS report later today, but first take a look at the treasury reaction.

Yield Curve 2011-02-04

click on chart for sharper image

Treasury Yields Soar

Bloomberg reports U.S. 10-Year Yield Climbs to 9-Month High on Employment Report

Treasuries fell, pushing the yield on the 10-year note to the highest in nine months, after the U.S. unemployment rate unexpectedly dropped to the lowest level since April 2009, fueling speculation the labor market will improve.

U.S. 30-year bond yields also rose to a nine-month high as Labor Department data showed the jobless rate fell to 9 percent last month and employers added 36,000 jobs, less than forecast, as storms swept the nation.

Last month’s gain in nonfarm payrolls was the smallest increase in four months and followed a 121,000-job rise in December that was larger than initially reported. Payrolls were projected to climb 146,000, according to the median forecast in a Bloomberg News survey of economists. The jobless rate fell for a second month. It was 9.4 percent in December.

“This is one of those lies, damned lies and statistics moments,” said Mitchell Stapley, the Grand Rapids, Michigan- based chief fixed-income officer for Fifth Third Asset Management, which oversees $22 billion. “You saw that 9 percent, and the market’s reaction was ‘that can’t be right.’ You’ve got people dropping out of the workforce. There’s some statistical anomaly at work.”

Payrolls in construction and transportation, industries most affected by bad weather, dropped in January, while factory employment rose the most since August 1998.

Mike “Mish” Shedlock
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