The 10-year Treasury yield pulled back Friday, after briefly hitting a multimonth high, as investors digested key labor market data that showed the economy added fewer-than-expected jobs in July.
The yield on the 10-year Treasury touched a high of 4.206%, the highest level since Nov. 8, 2022, before dropping nearly 15 basis point to 4.042%. The 2-year Treasury fell more than 12 basis points to 4.772%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Treasurys
Nonfarm payrolls expanded by 187,000 for the month, slightly below the Dow Jones estimate for 200,000. Though the headline number was a miss, it actually represented a modest gain from the downwardly revised 185,000 in for June.
Average hourly earnings, a highly scrutinized figure amid the Fed's inflation fight, rose 0.4% for the month, good for a 4.4% annual pace. Both numbers were higher than the respective estimates for 0.3% and 4.2%.
"July payrolls missed against consensus for the second straight month after beating consensus 15 months in a row," said Thomas Simons, senior economist at Jefferies. "... The wage data is stronger than the payroll data, suggesting that demand for labor is still robust, and that the slowing pace of hiring is more due to a lack of supply of labor."
Following the Fed's last meeting in July, chairman Jerome Powell suggested that a broad range of options are still on the table regarding interest rates, including further hikes, but also a pause of the central bank's rate-hiking campaign. Powell indicated that economic data will play a key role in such decisions.
Investors are looking ahead to next week's July consumer price index, which could inform the central bank's rate decision at its next meeting in September.