36,000 jobs were lost in February according to the Bureau of Labor Statistics. The unemployment rate held steady at 9.7%. The payrolls number was MUCH BETTER than expected. The unemployment rate beat forecasts by 0.1%.

FEB NONFARM PAYROLLS -36,000 (CONSENSUS -50,000) VS JAN -26,000 (PREV -20,000)
FEB JOBLESS RATE 9.7 PCT (CONS 9.8 PCT) VS JAN 9.7 PCT (PREV 9.7)
FEB AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.1 PCT (CONS +0.2) VS JAN +0.2 PCT, TO $22.46 VS JAN $22.43
FEB YEAR-ON-YEAR AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +1.9 PCT
FEB AVERAGE WORKWK ALL PRIVATE WORKERS 33.8 HRS (CONS 33.7) VS JAN 33.9, FACTORY 39.5 VS 39.9, OVERTIME 2.6 VS 2.8
FEB FACTORY JOBS +1,000 (CONS -15,000) VS JAN +20,000 (PREV +11,000)
FEB GOODS-PRODUCING JOBS -60,000, CONSTRUCTION -64,000
FEB PRIVATE SERVICE-PROVIDING JOBS +42,000, RETAIL UNCH, GOVT -18,000
FEB AGGREGATE WEEKLY HOURS INDEX FOR ALL PRIVATE WORKERS -0.3 PCT VS JAN +0.3 PCT
DEC NONFARM PAYROLLS REVISED TO -109,000 FROM -150,000

US LABOR DEPT SAYS "CANNOT SAY" HOW MUCH FEB EMPLOYMENT WAS AFFECTED BY SEVERE WEATHER

The labor force grew by 352,000 people in February....

The government added 18,000 jobs. Temporary help services was a huge contributor to job add ons.  The construction industry shed 64,000 heads....that could be the snow effect. It could also be general weakness in housing demand.  Also note that December was revised to -109,000 from -150,000. January was revised from -20,000 to -26,000. The two revisions together account for a +35,000 swing...almost completely offsetting the -36,000 read in February.

 The unemployment rate including discouraged workers and the underemployed was 16.8% in February...up 0.3% from Jan but 0.4% below Dec 2009.

The initial reaction in the rates market...

The 3.625% coupon bearing 10 year TSY note is -0-16 at 99-21 yielding 3.666%

The FN 4.0 is -0-13 at 98-06 yielding 4.175% and the FN 4.5 is -0-09 at 101-04 yielding 4.376%.  The secondary market current coupon is 4.306%. The CC yield is +63.8bps over the 10yr TSY yield and 60.6bps over the 10yr swap. Prices fell as low as 100-31 before bouncing back up to the low print of yesterday's sideways range....which failed to hold.

Stock futures ticked higher...