US Treasury yields slip after unemployment rate ticks back to 4%

U.S. government debt yields slipped on the last trading day of the week after the Department of Labor reported that the economy added more jobs than expected in June, but the unemployment rate ticked higher.

The yield on the benchmark 10-year Treasury note was lower at around 2.829 percent at 11:26 a.m. ET, while the yield on the 30-year Treasury bond was lower at 2.934 percent. Bond yields move inversely to prices.

The Department of Labor reported Friday that the economy added 213,000 jobs throughout the month of June, but the unemployment rate ticked back up to 4 percent. Economists polled by Reuters expected gain of 195,000 jobs.

“I thought it was a very good number for the financial markets, both for equities and fixed income,” said Gary Pollack, head of fixed-income trading at Deutsche Bank Private Wealth Management. “It shows the labor market continues to growth, but not so much as to push inflation too much.”

In addition to the payroll gains, average hourly earnings rose 2.7 percent year over year, or up 0.2 percent month over month, a bit below expectations of a 2.8 percent increase.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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"This morning’s latest employment report, while solid, offers little indication for concern of an overly aggressive labor market resulting in rapidly rising wage gains and no further evidence to support the more hawkish fear of out of control price increases," wrote Lindsey Piegza, chief economist at Stifel Nicolaus. "In fact, for the Committee members on the fence regarding a fourth potential increase come December, a tick up in the unemployment rate coupled with a lack of meaningful improvement in earnings reduces the pressure to take additional action.

Concerns surrounding trade resurfaced Friday, after U.S. tariffs on $34 billion of Chinese goods came into effect. Major economies around the world are braced now for a trade war.

China responded to the fresh tariffs by imposing its own retaliatory levies on imports from the States. A spokesperson for China’s Ministry of Commerce stated Friday that while Beijing had refused to “fire the first shot,” it was obligated to counter the U.S.’ actions after Washington “launched the largest trade war in economic history.”

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On Thursday, the Federal Reserve published the minutes from its June meeting, which revealed that Fed officials are concerned about letting the U.S. economy become too strong, as this could trigger major issues later on, if unchecked.