456,000 Jobs Added In March: Strong Employment Figures Help Send Interest Rates Higher
After two months in which bad weather held down hiring, U.S. businesses and governments added nearly a half-million workers to payrolls last monthÛÓabout double what many analysts had expectedÛÓas the nationÛªs unemployment rate held steady at 6.5 percent.</br></br>YesterdayÛªs unexpectedly strong Labor Department report caused interest rates to continue their recent sharp upward march. Rates on 30-year U.S. Treasury bonds reached 7.26 percent, more than a full percentage point above their level at the beginning of February when bond prices started their tumble.</br></br>Bond investors and traders took the report as a sign the economy is growing so fast that it will cause inflation to worsen and prompt the Federal Reserve to raise short-term interest rates significantly. To protect themselves against those possibilities, investors demanded higher rates before they would commit their money.</br></br>Some analysts said they expected yesterdayÛªs rise in interest rates to trigger another large sell-off when the stock market, which was closed yesterday in observance of Good Friday, opens Monday.</br></br>YesterdayÛªs bond market decline again illustrates how news of a strengthening economy can rattle financial markets already in a bearish mood. That is largely because investors and traders fear that strong economic growth will lead to higher inflation and interest ratesÛÓtwo things that invariably unsettle markets. [See story, Page D12.)