For the third month in a row, the economy shed jobs, suggesting that the U.S. is in a recession. March's monthly loss of 80,000 jobs is the largest since March 2003 and follows January and February's losses of 76,000 each. The weak data is edging mortgage rates lower as we head into the weekend. The connection between poor jobs data and today's falling mortgage rates is a little bit strained, but worth discussing. It all comes down to expectations. Prior to today, there was an expectation that the Federal Reserve's recent rate cuts would over-ignite the economy sometime this Summer. The Fed has cut 3 percent from the benchmark rate since September 2007. Meanwhile, consumer spending makes up two-thirds of the economy and people can't spend if they don't earn. So, after today's report showing fewer workers (and falling confidence levels to boot), the largest component of the economy is expected to sag for a while. This lack of spending should offset the cumulative impact of the Fed's rate cuts and lowers the expectation for runaway inflation later this year. Now for the connection: If inflation causes mortgage rates to rise, it's the absence of inflation that causes them to fall. And that's precisely what we're seeing today.