The biggest increase in jobs in three years pushed interest rates to their highest level since before the worst days of the credit crisis in 2008. With the stock market closed for Good Friday, investors had a shortened day of trading in the bond market to react to the Labor Department’s report that employers added the most jobs in March since before the recession began in December 2007. Treasury prices fell after the report, sending their yields higher. Bond prices tend to fall as investors’ confidence grows and demand for safe-haven investments wanes.
The yield on the 10-year Treasury note rose to 3.94 percent from 3.87 percent late Thursday, its highest level since last June and the latest sign of confidence that the U.S. economy is recovering. The yield on the 10-year note is tied to many kinds of consumer loans. The increase could raise borrowing costs for mortgages and other debt.
The bond market seems to have taken it as a very positive number, Stock futures contracts rose in an abbreviated session of electronic trading. U.S. investors will get their first taste of how the upbeat report will drive stocks when trading in Asia begins late Sunday. Dow Jones industrial average futures and Standard & Poor’s 500 index futures each rose about 0.3 percent.
The yield on the 10-year note is approaching 4 percent, a level that hasn’t been seen since October 2008, just before the financial crisis peaked. The 10-year’s yield went as high as 4.09 percent that month, before plummeting as low as 2.06 percent in December 2008 as the credit crisis erupted and investors poured money into bonds as they cut back their exposure to risk.
Friday’s trading was the closest the yield has been to 4 percent since June, when it reached 3.96 percent.
