U.S. Treasury debt prices climbed on Friday, with investors focusing on a surprising drop in U.S. average hourly wages and slumping oil prices that aggravated worries the global economy is sputtering.
U.S. government debt was also boosted by a fall on Wall Street, where stocks were down nearly 1 percent after two days of outsized gains. Increases were largest in longer maturities.
Yields on benchmark 10-year bonds—used to calculate mortgage rates and other consumer loans—fell to 1.962 percent, having closed at 2.016 percent in the previous session. The yield on the 30-year bond rose 1-11/32 in price to yield 2.54. Earlier, the 30-year hit a session low of 2.549 percent. (Yields move inversely to price.)
The U.S. economy created 252,000 jobs in December, while the unemployment rate dropped to 5.6 percent. Economists had seen job growth at 240,000, with a jobless rate of 5.7 percent. However, average hourly wages declined, suggesting a lengthening of the time before the Federal Reserve raises interest rates.
Bond investors largely shrugged off strong U.S. employment data for December and focused on a five-cent decline in hourly wages that suggested the Federal Reserve may be slow about raising benchmark U.S. interest rates.
"Yes, we had job growth," said Sharon Stark, fixed income strategist at D.A. Davidson. "But job growth without growth in pay is not a sustainable model."
The Fed may not act until 2016, given disinflationary forces affecting the global economy, Stark said.