Economy Moves ahead.

The economy presses ahead, and mortgage rates tick higher: soitwill be until monetary policy is restrictive enough to lulltheeconomy back to sleep. It's not clear how high rates must beforthat to happen, but it's clear that the market doesn'tbelievewe're there just yet. The economic news continues to beroundlygood, with only a few notable signs of cooling, and pricepressures don't seem to be in a hurry to fade. Thatcombinationwill lead rates higher.While the most important turn-of-the-month data wasn't ablockbuster, it was enough to serve as simple reinforcementof therecent upward trend for rates. The employment report forMarchreleased Friday noted 211,000 new hires for the month,slightlyabove expectations. February and January's numbers werereviseddownward a bit, but not significantly, and the first quarterof2006 saw a healthy average of 197,000 jobs created per month.Labor growth has been solid for months, and the officialunemployment rate ticked downward to 4.7%, matching the lowforthis expansion. Wage growth for March was muted, rising just0.2%(now 3.4% year over year), and keeping wage inflationcontained isamong the Fed's primary concerns, as it represents a moreintractable kind of inflation.Next in line in terms of market-moving relevance were the twoseries from the Institute for Supply Management. The ISMindexwhich reports on manufacturing eased a little in March,slippingfrom 56.7 in February to a 55.2 reading. That easing ofactivitywas accompanied by a slight increase in the inflationcomponent ofthe report. However, the ISM's report covering service-relatedbusinesses noted the opposite: an minor increase in overallactivity but a decrease in the "prices paid" sub-index. Bothseries remain in solid territory, with price pressures belowthoseseen at the end of 2005.