Interest rates rise in bond market on stronger-than-expected jobs report for February

Rates rise on reassuring jobs report

CHARLOTTE, N.C. — Interest rates leapt higher in the bond market Friday after the government reported better-than-expected February jobs data.

The Labor Department said the unemployment rate held at 9.7 percent in February as employers shed 36,000 jobs. That was fewer than the 50,000 cuts analysts expected. The figures suggest the job market is slowly healing but that significant hiring has yet to occur.

The reassuring news about led investors to sell out of bonds and buy riskier assets like stocks. Traders view government bonds as safe investments, while stocks typically provide bigger returns when the economy is growing.

The yield on the 10-year Treasury note that matures in February 2020 rose to 3.69 percent from 3.61 percent late Thursday. Its price fell 21/32 to 99 15/32. Bond prices move in the opposite direction of their yields. The 10-year yield is used to determine rates on many consumer loans.

The jobs report gave stocks a lift, after a late-day rally on Thursday. The Dow Jones industrial average rose 122 points, as other major indexes rose more than 1.4 percent.

Investors also rallied around a Federal Reserve report that said consumer borrowing rose in January. Consumer borrowing rose by $4.96 billion, surprising economists who were looking for borrowing to decline by $4.5 billion. The small gain, the first in nearly a year, added to the hopes that Americans are regaining confidence in the economy.

The yield on the 30-year bond that matures in February 2040 rose to 4.65 percent from 4.56 percent. Its price fell 1 12/32 to 99 21/32.

The yield on the two-year note that matures in February 2012 rose to 0.91 percent from 0.86 percent. Its price fell 3/32 to 99 30/32.

The yield on the three-month T-bill that matures June 3 rose to 0.14 percent from 0.13 percent. Its discount rate was 0.15 percent.