Jobs Report Pushes Treasury Yields Down

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Yields on U.S. Treasury’s fell on Friday following the release of the latest jobs report. The number of jobs added returned to a normal range while wage growth was modest.

On Friday, the Department of Labor released the March jobs report, showing an increase of 196,000 in nonfarm payrolls in March. This is up sharply from February’s estimate of 20,000 jobs added.

“With a strong March employment report now in the books, we’ve gotten some reassurance that the labor market is still strong,” said Steve Rick, Chief Economist with CUNA Mutual Group. “Of course, last month’s nosedive was disappointing, especially after December and January had such impressive numbers despite some sizeable headwinds. But a good March report shows that February was more of an outlier than a canary in the coal mine.”

During early trading on Friday, the yield on the benchmark 10-year Treasury note was at 2.498% after reaching a high of 2.522% on Thursday. The yield on the 30-year Treasury bond was at 2.903% during trading, down from Thursday’s high of 2.939%.

According to the report, unemployment remained steady at 3.8%, unchanged from February. The bureau estimates the number of unemployed individuals at 6.2 million. Average hourly earnings are up 3.2% over the last 12 months.

“This is a perfect report for the Fed because it actually corroborates what they’ve been saying all along, which is that there are no wage pressures,” said Subadra Rajappa of Societe Generale SA. “There’s very little risk of wage inflation.”

The 10-year Treasury note yield closed at 2.50%, while the 30-year Treasury bond yield was 2.91%.

Published April 12, 2019