U.S. Treasury yields saw a mixed finish Friday, with the yield on the 2-year note rising edging down a day after ending at a more-than-150-year high as investors assessed a stronger-than-expected October jobs report.
- The yield on the 2-year Treasury note TMUBMUSD02Y, 4.691% fell 4.7 basis points to 4.652%, after ending Thursday’s session at 4.699%, which was its highest finish based on 3 p.m. ET levels since July 25, 2007, according to Dow Jones Market Data. Yields and debt prices move opposite each other.
- The yield on the 10-year Treasury note TMUBMUSD10Y, 4.163% rose 3.4 basis points to 4.157%.
- The yield on the 30-year Treasury bond TMUBMUSD30Y, 4.252% rose 9.6 basis points to 4.247%.
What’s driving markets
The U.S. economy added 261,000 jobs in October, while the unemployment rate rose to 3.7% from 3.5%. Economists polled by The Wall Street Journal had expected payrolls to rise by 205,000, with the unemployment rate staying at 3.5%.
In October, wages grew 0.4%. Average hourly pay rose slightly in September to $32.58, lowering the increase over the past year to 4.7% from 5%.
Stocks and bonds extended selloffs after Fed Chair Jerome Powell on Wednesday indicated interest rates would need to rise significantly above where officials had previously expected in the face of persistent inflation. He noted that the labor market continued to run hot, adding to inflation worries.
Analysts said investors took some solace in the rise in the unemployment rate and perhaps the slowdown in the annual pace of wage growth.
What analysts say
“As labor demand continues to cool, the Fed should take some comfort in the fact that wage growth still lags overall inflation and is decelerating, reducing the threat of the pass-through of wages to overall inflation. For investors, this report signals continued resilience in the labor market amidst recession fears, without additional warning signs on inflation,” said David Kelly, chief global strategist at J.P. Morgan Asset Management, in a note.