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So how many lives does this Goldilocks market have, anyway?

This morning the Bureau of Labor Statistics reported that the U.S. economy added just 98,000 jobs in March. That was the weakest gain since May 2015 and way under the 180,000 jobs expected by economists surveyed by and the 263,000 jobs added according to the private ADP Employment Situation Report on Wednesday.


If you wanted to explain the shortfall, weather provided a handy excuse. A storm in the Northeast during the survey week and colder temperatures after a warmer than average January and February cut into job gains in sectors such as construction that had been a big driver of increased employment in February.


The March report showed the lack of slack in the labor market that has pushed the Federal Reserve toward raising interest rates. The fullest unemployment measure, the U-6 rate, which includes discouraged workers who would like a job but have given up looking for one and workers with part-time jobs who would like to work full-time, fell to 8.9%. That the first drop below 9% since 2007 and the lowest rate since December 2007. The number of discouraged workers not looking for work fell to 460,000 in March, the second-lowest level since August 2008.

Average hourly earnings increased 2.7% in March from a year earlier, a bit above the average rate of growth in hourly earnings since the start of 2016.

The combination of the disappointing top line number with apparent strength in numbers such as earnings and the U-6 rate, left the market believing that the Fed would raise rates as it has promised but not any faster than expected. If anything, the market seems to have concluded today, the interest rate increases might be just a little bit slower to materialize that the Fed has signaled.

And that is in tune with the expectations of this Goldilocks market.

The yield on the 10-year U.S. Treasury was up three basis points today to 2.38%. That’s almost exactly the 2.39% yield at the end of last week.