Treasury yields fall after reports suggest slowing economic growth

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U.S. Treasury yields were lower on Wednesday as investors digested reports that suggested weakening economic growth.

At 2:01 pm ET, the 10-year Treasury yield was down 2 basis points at 4.106%, after having fallen by as many as 10 basis points on Tuesday. The 2-year Treasury yield was last trading at 4.87% after falling by 1.7 basis points. On Tuesday, it had dropped by as many as 16 basis points.

Yields and prices move in opposite directions and one basis point equals 0.01%.

Private payroll data from ADP showed employers added 177,000 jobs in August, which was lower than a Dow Jones forecast of 200,000, and sharply below the revised July reading of 371,000.

That take, coupled with a downward revision in the second-quarter gross domestic product to a 2.1% annualized rate of growth, suggests a cooling off in the economy, although the pace is still healthy.

Wall Street is more keenly awaiting forthcoming non-farm payroll data due out Friday to better predict the overall health of the economy and where job growth is headed. Traders are also eyeing fresh initial jobless claims figures on Thursday.

Meanwhile, yields fell Tuesday as investors considered economic data, including the latest consumer confidence index which came in at 106.1, lower than the previous Dow Jones estimate of 116. The report also showed that consumers' inflation expectations for the next 12 months increased. JOLTs job openings data, also published Tuesday, reflected a fall of available positions to 8.8 million In July, the lowest level since March 2021.   

The fresh data could inform the Federal Reserve's next interest rate policy decision, which is expected in September. Uncertainty about whether the central bank will increase interest rates again or if its July rate hike marked the end of the rate-hiking cycle that has been going on since early 2022 has spread in recent weeks.

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