US Treasury yields declined on Thursday as investors reacted to new data suggesting potential softness in the labor market, CNBC reports.
The 10-year Treasury yield fell by more than 2 basis points to 4.343%, while the 2-year yield slipped over 1 basis point to 3.864%. Meanwhile, the yield on the 30-year Treasury bond dropped more than 3 basis points to 4.849%. In the bond market, yields move inversely to prices.
The dip in yields followed a larger-than-expected increase in jobless claims. The Labor Department reported that initial applications for unemployment benefits rose to 247,000 last week, exceeding the Dow Jones estimate of 236,000. This marked the highest level of weekly jobless claims in eight months.
Thursday’s move extended a downward trend in yields that began the previous day, following a series of weaker-than-anticipated economic indicators. Notably, the Institute for Supply Management reported that the US services sector contracted slightly in May, with activity dropping to 49.9%—just under the 50% level that separates expansion from contraction. Analysts had forecast a reading of 52.1%.
In addition, private sector employment data from ADP showed just 37,000 jobs were added in May, far below the expected 110,000. These figures have fueled concerns that the labor market may be cooling, although analysts say the data does not yet point to an imminent recession.
“The numbers are disappointing, but not alarming enough to suggest the US economy is heading toward a downturn,” Deutsche Bank noted in a research briefing.
Investors are now closely watching for Friday’s official jobs report, which will include nonfarm payroll growth and the unemployment rate for May.
