Treasury yields jumped Friday after the November jobs report showed the unemployment rate unexpectedly fall, suggesting continued tightness in the labor market despite the Federal Reserve’s efforts to cool the economy.
The yield on the 10-year Treasury note was up by 10 basis points at 4.233% as it recovered some losses made earlier in the week when it dipped as low as 4.14%. Similar levels were last seen in early September.
The 2-year Treasury was last more than 14 basis points at 4.725%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
The November U.S. jobs report showed continued resilience in the labor market. U.S. nonfarm payrolls rose by 199,000 last month, the Labor Department said Friday. That was more than the 190,000 jobs anticipated by economists surveyed by Dow Jones, and better than the October gain of 150,000.
Meanwhile, the unemployment rate fell to 3.7%, compared to a forecast for 3.9%.
“The data today, and the data all week long, supports ‘soft landing,'” Stephanie Link, chief investment strategist at Hightower Advisors, told CNBC’s “Squawk Box” on Friday. “There’s no question about it.”
Many investors have been hoping for economic data to signal an easing of the economy as they believe this could mean the end of the Fed’s rate-hiking cycle and a clearer idea on when rates may be cut.
Fed Chairman Jerome Powell said last week that speculating about rate cuts was “premature” and the central bank would tighten monetary policy further if necessary. The Fed is due to meet next week and is expected to keep interest rates unchanged then.
Earlier in the week, ADP’s private payrolls report for November showed that 103,000 jobs were added, lower than the 128,000 estimate. Weekly initial jobless claims figures came in lower than expected.
— CNBC’s Jeff Cox contributed to this report.
