Treasuries Give Back Ground Following Stronger-Than-Expected Jobs Data

(RTTNews) - Treasuries moved to the downside during trading on Wednesday, giving back ground following the notable strength seen in the previous session.

Bond prices regained some ground after an early slump but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 2.5 basis points to 4.172 percent.

The ten-year yield moved back to the upside after ending the previous session at its lowest closing level in almost a month.

The pullback by treasuries came following the release of a closely watched Labor Department report showing employment in the U.S. increased by much more than expected in the month of January.

The Labor Department said non-farm payroll employment jumped by 130,000 jobs in January after rising by a downwardly revised 48,000 jobs in December.

Economists had expected employment to climb by 70,000 jobs compared to the addition of 50,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.3 percent in January from 4.4 percent in December, while economists had expected the unemployment rate to remain unchanged.

However, the report also showed a significant downward revision to job growth in 2025, with the increase in employment revised to 181,000 jobs from 584,000 jobs.

The stronger-than-expected job growth in January may have reduced the likelihood of near-term interest rate cuts by the Federal Reserve, weighing on treasuries.

"Overall, this report provides support for FOMC officials who have voted to keep rates steady for the time being," said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.

Trading on Thursday may be impacted by reaction to the latest U.S. economic data, including reports on weekly jobless claims and existing home sales.

On Friday, the Labor Department is scheduled to release a separate report on consumer price inflation that may shed additional light on the outlook for rates.