Time to Start Investing Again April 2010? Stocks Move Higher On Favorable Economic Data in 2010

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As U.S. Treasury prices fell drastically, the dollar and stocks moved up higher. The reason for this was because jobs were created by U.S. employers at their fastest rate in three years, which gets a lot of investors thinking the economy is improving for good. More jobs mean people have more spending money, which means there are more retail purchases. More retail purchases will help the economy greatly, and make investors much more comfortable with the future economic picture.

Economists got some great news this past week as stocks shot up thanks to the Labor Department’s announcement that more jobs have been created. In fact, U.S. employers created jobs at a faster pace than has been seen in the past three years. In March, non-farm payrolls rose by 162,000, which is the largest gain since 2007, but it was not as high as the 200,000 forecasted. However, in February there was a decline in payrolls by 14,000.

While this does look like good news, there are some important factors to consider. In February, payrolls were down because of the large storms hitting the United States. Payrolls in March were up most likely because of the hiring done for the 2010 Census. Estimates peg that the hiring for the U.S. Census contributed 33 percent of the new jobs in March. So, there is still some distance for the economy to go if it is going to be recovering.

The Treasury Department saw its 10-year Treasury Yield jump up by about 3.954 percent, which is the highest level since June of last year.

In addition, the dollar continued its rise thanks to the fall of the Euro. The rise of .7 percent put the dollar at $1.35 compared with the Euro. The dollar also gained .9 percent against the Yen, allowing the dollar to trade above 94 Yen for the first time in roughly seven months.

In the next week, the Treasury Department should be selling about $82 billion in Treasury notes and bonds over the course of the next week.

All of this helped the Dow Jones rise through the week. On Thursday, the Dow Jones was up 70.44 points, or .65 percent, allowing it to finish at 10,927.07, which is the highest it has been in 18 months. This also pushes the Dow Jones towards the 11,000 point mark, which has not been reached since September 26, 2008.

The stock market approached the 11,000 mark thanks to the news from the Labor Department that there were more jobs being created in March. There are some investors who do worry that the gain in payroll is not as good as was thought considering the amount of jobs created by the U.S. Census. The gains were not as much as expected, but with the dollar going up there is some hope that the economy will be improving.

Further Reading:

Future of US Economy

What makes a stagnant Economy