Treasury yields were mostly higher Friday as traders weighed the latest U.S. jobs report.
The 2-year Treasury yield was last trading less than 1 basis point higher at 4.86%. The yield on the 10-year Treasury rose 9 basis points to 4.181%. Yields and prices have an inverted relationship. One basis point equals 0.01%.
The unemployment rate came in at 3.8% for August, up significantly from 3.5% in July and reaching the highest since February 2022, the U.S. Bureau of Labor Statistics reported Friday.
Meanwhile, average hourly earnings increased 0.2% for the month and 4.3% from a year ago. Both were below respective forecasts of 0.3% and 4.4%.
The good news from the report was that the U.S. added more jobs than expected. Nonfarm payrolls grew by a seasonally adjusted 187,000 for the month, above the estimate for 170,000, according to economists surveyed by Dow Jones. However, job numbers first reported for June and July were revised down by a combined 110,000.
Uncertainty about the Federal Reserve's policy path lingers after Chairman Jerome Powell suggested last week that further rate hikes may be needed to curb inflation, which he suggested remains too high.
Some believe that a weaker labor market would prevent the Fed from hiking rates further this year.
Money Report
"Monetary policy implications are relatively straight forward -- it just got a lot harder to justify a hike in Q4," Ian Lyngen, head of U.S. rates at BMO, said in a note Friday. "September is off the table; even if there is a modest upside surprise in the August CPI series."
Markets are pricing in an 93% chance that the Fed will keep rates unchanged at its September meeting according to CME's FedWatch tool, but opinions appear divided on what could happen next.
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