Bonds

Treasury yields fall after June unemployment rate edges up to 5.9%

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U.S. Treasury yields dipped on Friday as investors digested the June jobs report that showed a slight increase in unemployment rate.

The yield on the benchmark 10-year Treasury note fell 5 basis point to 1.42% touching its lowest level since June 21. The yield on the 30-year Treasury bond also slipped 5 basis points to 2.04%. Yields move inversely to prices.

Treasurys

Job growth leaped higher in June with nonfarm payrolls increasing 850,000, the Labor Department reported Friday. The number was higher than a Dow Jones estimate of 706,000 and better than the upwardly revised 583,000 in May.

The unemployment rate, however, rose to 5.9% from 5.8% in the prior month, which came in higher than the 5.6% expectation. Wages were up 0.3% for the month and 3.6% year over year, both in line with expectations.

"Today's report likely does not significantly change the Fed's calculus here, as the U.S. labor market is far from its 'full employment' mandate," said Jason Pride, CIO of private wealth at Glenmede.

"As enhanced unemployment benefits begin to expire later this summer, this may be a key turning point for the U.S. economy, as it seeks to make the transition from a reliance on fiscal stimulus injections to one that is fueled by a self-sustaining recovery from this extraordinary pandemic environment," Pride added.

The jobless rate increase came even though the labor force participation rate was unchanged at 61.6%.

There are no auctions scheduled to be held on Friday.