10-year yield returns near 16-year high after jobs report

U.S. Treasury yields rose Friday, with the 10-year nearing a 16-year high after the latest jobs data came in stronger than economists anticipated.

The yield on the 10-year Treasury was up by nearly 13 basis points at 4.839%. It had hit a fresh 16-year high earlier in the week, rising as high as 4.884%. The yield on the 2-year Treasury was last trading at 5.14% after rising by more than 11 basis points.

Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

Nonfarm payrolls increased by 336,000 in September, while economists surveyed by Dow Jones expected 170,000 jobs added. The unemployment rate was 3.8%, slightly higher than the 3.7% consensus estimate.

Investors will consider what the data could mean for interest rates. There have been mixed messages from policymakers about whether rates will need to go higher still to ease the economy, including the labor market, and cool inflation. However, Fed officials appear to widely expect rates to stay higher for longer.

Friday’s jobs report comes after mixed labor market data published throughout the week.

On Thursday, weekly initial jobless claims came in at 207,000 for the week ending Sept. 30, below the 210,000 Dow Jones estimate. Earlier in the week, however, payroll processing firm ADP reported that private payrolls grew by 89,000 in September, which was far lower than expected and marked a sharp decline from August’s figure of 180,000.

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