Jobs Report Boosts Bond Prices

U.S. bonds posted their biggest price increase in four weeks Friday as a report on March jobs eased concerns that a robust economy might lead to inflation.

“There’s good news in this report” for the bond market, said Ned Riley, chief investment officer at BankBoston. The release “suggests there are little inflationary pressures out there.”

The 30-year Treasury bond yield fell to 5.59%, from 5.67%, on Thursday. Yields on two-year notes, the most actively traded Treasuries, fell to 4.93%, from 5.01%.

The government said 46,000 jobs were added in March, marking the slowest growth in more than three years. Average hourly earnings, an inflation gauge, rose a less-than-expected 0.2%.

Bond yields rose more than one-half percentage point in the first three months of 1999, marking the worst quarterly performance in three years, as reports indicated the economy wasn’t losing steam.

Thirty-year bonds handed investors losses of about 5.7% in this year’s first quarter, taking into account price declines and interest payments.

Meanwhile, most stock markets were closed for Good Friday, but in Tokyo, the Nikkei-225 index dipped 0.2%.