Since mid-March, markets have assumed a better U.S. economy, moving to self-sustaining ground, with the 10-year Treasury note spiking from 2 percent to 2.35 percent, and mortgages up almost the same amount.

The primary basis for the improved attitude: the Fed’s announcement in March that a third round of quantitative easing ("QE3") was on hold.

Then, this week’s release of the Fed’s March meeting minutes again plunked the bond market, with rates rising — an odd reaction to the same news, like a couple of guys losing five bucks on the instant replay of a Kentucky kid dropping a three-pointer.

Never mind. Today’s payroll figures for March arrived at half the forecast — only 120,000 jobs. In thin, holiday-time trading, the 10-year is back to 2.05 percent, with mortgage rates near 4 percent and some even below that mark.

Analytical cautions: It’s only one month’s report in a guesstimate series often revised. Some observers found optimism in the stability of government payrolls last month, for the first time in two years.

There is no double-dip evidence: The twin Institute for Supply Management reports for March arrived largely unchanged at 53.4 for manufacturing and 56 for the service sector; and auto sales were at the highest level in four years.

I have no hard-data proof, but it is clear in sidewalk conversations with civilians that we are less afraid, less concerned that there is another bottom to fall out.

I think stronger economic activity is flowing from those not badly harmed by the Great Recession, who are at last tiptoeing out of their bunkers.

Enough with the positives. This is only one poor payroll report, but the strength everyone was happy with was only three months’ worth, and warm-winter months at that.

Local government payrolls face deeper cuts as pension and benefit promises hit reality walls, and jobs lost in this sector have been among the very best. We have austerity ahead at the federal level, no matter what — and no matter who wins in November.

The effect of austerity on already rocky economies is plain in Spain, which is trying to cut its budget by the same gross domestic product percentage as the U.S. at the end of 2012 (U.S. equivalent: $500 billion).

Even before these cuts take effect, Spain’s economy is spiraling toward implosion, with unemployment so high (officially 23 percent and rising; youth near 50 percent) that tax revenue is falling out from under budget cuts and adding to loan defaults.

The U.S. is not in a euro-trap; although we cannot devalue, we can quantitatively ease.

Federal Reserve politics may bore everyone, but here’s a little help in decoding Fed-speakers and sorting media scare headlines from actual news of Fed policy.

In the last month, media have had a blast quoting minor Fed officials saying it’s time to raise rates, no more stimulus is necessary, the economy’s fine, and so on, whipsawing the stock market, which wants both stimulus and a better economy.

Here is the decoding tool: The Fed has seven "governors," including the chairman, appointed by presidents and confirmed by the U.S. Senate; and 12 regional Fed banks located in places proportional to the U.S. economy in 1912.

I mean no disrespect to the cities involved. Not much, anyway. The governors all have a vote at every meeting, as does the president of the New York Federal Reserve, and four regionals rotate voting privileges.

The overcovered Fed "yappers" in the last month have all been presidents of regional Fed banks. If you see a headlined Fed statement, look to see if it’s given by a governor or a regional president.

If regional, ask yourself, "Big city or boondocks?"

Regional presidents are selected by regional-bank boards of directors (also selecting themselves); the farther into the weeds, the more narrow and remote to today’s global economy.

Thus if you hear from Federal Reserve regional presidents in Richmond, Va.; Philadelphia; St. Louis; Minneapolis; Atlanta; and Dallas, know their pinched, insider-promotion, hard-money bias.

Kansas City’s former regional Fed president became the most famous regional blowhard, but his replacement has yet to say much. It is not an accident that the big, coastal-city presidents support an active Fed: their boards are much closer both to centers of U.S. commerce and to continuing global hazard.

The governors in New York, San Francisco, Chicago, Cleveland and Boston all are all on the chairman’s page: "far too soon to declare victory." QE3 odds rose today.

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