Interest rates rise after jobs report

NEW YORK — Interest rates rose in the bond market Friday after the government said employers added jobs in March for only the third month since the recession began.

The yield on the 10-year Treasury note, which is often used as a benchmark for consumer loans, rose to its highest level since last June and approached 4 percent for the first time since 2008.

The yield on the 10-year note maturing in February 2020 rose to 3.94 percent from 3.87 percent late Thursday. Its price fell 14/32 to 97 14/32.

Interest rates have been creeping higher in recent weeks as more data shows the economy is on the upswing, even if growth is slow.

The Labor Department said 162,000 jobs were added to payrolls in March. Economists had forecast employer would add 190,000 jobs.

The report adds further evidence that the economy is recovering, even though jobs were created at a slower pace than forecast. Investors often sell Treasurys and favor riskier assets like stocks and commodities when the economy is improving.

That's because investments other than Treasurys traditionally provide the potential for bigger profits. Inflation also typically increases when the economy is strong, so rates must move higher to keep pace.

The yield on the 10-year note hasn't been this high since it reached 3.96 in June. It last traded above 4 percent in October 2008, just before the credit crisis peaked and investors poured money into bonds for safety. The yield fell as low as 2.06 percent in December 2008.

The 10-year's yield climbed as high as 3.95 percent during trading Friday.

The bond market closed early for the Good Friday holiday. The stock market was closed.

In other trading, the yield on the two-year note that matures in March 2012 rose to 1.11 percent from 1.06 percent. Its price fell 2/32 to 99 25/32.

The yield on 30-year bond that matures in February 2040 rose to 4.80 percent from 4.73 percent. The price fell 1 to 97 7/32.

The yield on the three-month T-bill that matures July 1 rose to 0.16 percent from 0.15 percent. Its discount rate was 0.16 percent.