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Treasury yields turn higher after poor August jobs report

U.S. Treasury yields rose on Friday as investors digested a disappointing August jobs report.

The yield on the benchmark 10-year Treasury note gained about 3 basis points, trading near 1.322%. The yield on the 30-year Treasury bond rose more than 3 basis points to 1.943%. Yields move inversely to prices and 1 basis point is equal to 0.01%.


Job creation for August was a huge disappointment, with the economy adding just 235,000 positions, the Labor Department reported Friday. Economists surveyed by Dow Jones had been looking for 720,000 new hires.

August's total was the worst since January and comes with heightened fears of the worsening pandemic potentially detailing the economic recovery.

The unemployment rate dropped to 5.2% from 5.4%, in line with estimates.

Investors was focused on the data as the recovery in the U.S. labor market is being used by the Federal Reserve to gauge when it should tighten monetary policy. A big miss like this will likely make the central bank push out its plan to announce dialing back its massive monthly bond-buying program.

"It certainly throws into doubt some of the taper timelines that have been discussed," said John Briggs, head of macro strategy at NatWest Markets. "Is this a softening or an aberration?"

Growth in average hourly earnings continues to come in strong with a 0.6% rise month over month, the employment report showed. Some pointed out that the big jump in wages has inflationary implications, which also pushed yields higher.

The 10-year yield has traded choppily in recent weeks near 1.3%. The benchmark Treasury rate sharply earlier this year and broke above 1.7%, leading many strategists to predict that it would hit 2%, before tumbling back to 1.1% in early August.

CNBC's Yun Li and Maggie Fitzgerald contributed to this market report.


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