April's surprisingly strong payroll figures are expected to clear the path for continued Federal Reserve rate hikes. With the payroll number leaping to 274,000 new jobs versus the 174,000 many economists had expected, the 10-year jumped to 4.24% from 4.16% right after the news. "The number was a surprise to the upside to say the least," said Jason Schenker, economist at Wachovia Bank.
The strong employment number squashes the theory some Fed watchers have had the Fed will pause in the very near future. "While we don't see them going 50 basis points, all signs point to continued moderate rate hikes," Schenker said. The strong number was also a shot in the arm for an economy many economists had seen as falling into a so-called soft patch.
