Bonds

Treasury yields fall amid job market doubts: June was 'respite from the storm'

U.S. yields fell on Thursday, reversing an earlier uptick, as more traders began to doubt the longevity of nonfarm payroll gains amid persistent unemployment claims and a spike in coronavirus cases.

The yield on the benchmark 10-year Treasury note slipped to 0.669% and the yield on the 30-year Treasury bond ticked lower to 1.429%. Bond yields fall as their prices rise.

Treasury yields initially rose Thursday morning after the Labor Department reported U.S. nonfarm jobs increased by 4.8 million in June, far better than the 2.9 million jump economists polled by Dow Jones had been expecting.

Investors also at first applauded a decline in the national unemployment rate, which dropped to 11.1% from 13.3% in May.

But lingering pessimism over elevated unemployment claims later eclipsed the bond market's optimism over the June payrolls numbers.

Treasurys

In a separate report, the Labor Department said Thursday that initial jobless claims rose by 1.427 million. The print marked the 15th straight week in which initial claims remained above 1 million and a came in higher than expected by economists.

The data also showed the number of continuing claims — the number of people receiving unemployment benefits for consecutive weeks — rose to 19.29 million, an increase of about 59,000.

"Unfortunately, deepening pain is on the horizon. As bad as the labor market is, it's likely that June is a temporary respite from the storm," wrote Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute.

"Given the increase in coronavirus over the last couple of weeks along with re-shuttering of businesses as well as the pending expiration (on July 25th) of the $600 enhanced weekly unemployment insurance benefits, June's labor market—as weak as it is—is the best we can expect for a while," she added.

More governors of states most impacted by a fresh surge in coronavirus infections have reversed plans to reopen their economies, after the U.S. saw its second-highest daily rise in new cases to date on Wednesday, with California and Arizona setting records.

- CNBC's Pippa Stevens contributed reporting.