Strong October jobs report sends yields higher
SPY•U.S. payrolls rose by 165,000 in October, well above the 65,000 forecast, and unemployment fell to 4.1% from 4.2%. Treasury yields rose after the report, while bets on a Federal Reserve rate increase next month climbed to 78% from 70%.
1. Jobs exceed forecasts
Nonfarm payrolls increased by 165,000 in October after a revised gain of 60,000 in September. Economists had forecast a 65,000 increase in October, and the unemployment rate declined to 4.1% from 4.2%.
2. Yields rise after report
Treasury yields rose after the data was released before pulling back. The two-year yield was up 5 basis points at 4.52%, the 10-year yield gained 4 basis points to 4.88%, and the 30-year yield rose 3.6 basis points to 5.29%. Bets on a Fed rate increase next month rose to 78% from 70% earlier.
3. Economists weigh in
Brian Jacobsen of Annex Wealth Management said the report exceeded consensus by 100,000 jobs and that revisions added 84,000 jobs. Peter Cardillo of Spartan Capital Securities said the report showed a labor market extending a long period of growth and cited annual hourly wage growth of 3.1%.
