Jobs Growth Heats Up

Updated from 9:34 a.m. EDT

A higher-than-expected 180,000 nonfarm jobs were added in March, while payrolls for the previous two months were revised higher, the Labor Department reported Friday. The unemployment rate unexpectedly fell to a five-year low of 4.4% in March from 4.5% in February.

The consensus expectation was for nonfarm payroll growth of 135,000 (down from 150,000 a week ago) and for the unemployment rate to tick up to 4.6%. February payrolls were revised up to 113,000 from 97,000, while January payrolls were revised up to 162,000 from 146,000.

Average hourly earnings rose 0.3% last month, in line with expectations. Average hours worked rose to 33.9 from 33.8, matching expectations.

"Despite the significant soft patch in the U.S. economy, the labor market has remained surprisingly resilient in recent quarters, a key factor in keeping the Fed rather firmly on hold," writes Peter Kretzmer, senior economist at Bank of America.

Breaking down the payrolls, the manufacturing sector lost 16,000 jobs in March while retail trade jobs rose 36,000, Kretzmer notes. "The strongest gains in service-providing jobs continued to be concentrated in healthcare -- up 38,000 in March -- and leisure and hospitality -- which added 21,000 jobs."

Treasuries sold off in reaction to the stronger-than-expected data, which will reduce the likelihood of a near-term rate cut by the Federal Reserve. The benchmark 10-year note was recently down 15/32 to yield 4.74%. The dollar was higher vs. the yen and euro.