U.S. economy added 243,000 jobs in Jan.; jobless rate fell to 8.3% By Deborah Levine, MarketWatch NEW YORK (MarketWatch) — Treasury prices turned sharply lower on Friday, pushing yields up, after the U.S. government said the economy added many more jobs in January than economists expected, boosting confidence that the economy continues to grow. Yields on 10-year notes 10_YEAR +4.55% , which move inversely to prices, turned up 7 basis points to 1.90%, after touching 1.95% just after the report and up from near their lowest level in about six weeks. A basis point is one one-hundredth of a percentage point. Thirty-year bond yields 30_YEAR +3.56% jumped 11 basis points to 3.12%. Yields on 5-year notes 5_YEAR +6.04% rose 4 basis points to 0.75%, after touching a record low earlier this week. Two-year yields 2_YEAR +1.74% were little changed at 0.23%. Bonds turned down after the Labor Department said the economy added 243,000 jobs in January. Also, the unemployment rate unexpectedly declined to 8.3%. See story on jobs report. Analysts and investors had expected a somewhat disappointing employment report, but the sell-off in bonds may be limited as they remain cognizant that the Federal Reserve is keeping the door open to undertake a another large-scale bond purchase program, sometimes referred to as a third round of quantitative easing, or QE3. Muddling growth of around 2% “remains disappointing and keeps inflation fears very much at bay,� said David Ader and Ian Lyngen, bond strategists at CRT Capital Group. “This is why the market is behaving so well. It’s about neutral positions occasionally getting bounced by efforts to sell strength that simply is not working because the big backdrop is QE3, or the risk thereof.� “We can talk as much as we want to about the merits and odds of such a program, but, well, you don’t fight the Fed,� they wrote in emailed comments. Still to come is the ISM report on the services sector of the economy.

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