Treasury yields rise after strong jobs gains

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U.S. government debt yields rose on Friday after the U.S. government said that job creation was stronger than expected in March, but wages grew at a sluggish pace.

The yield on the benchmark 10-year Treasury note rose to 2.538%, while the yield on the 30-year Treasury bond climbed to 2.947%. Bond yields move inversely to prices.

Job creation snapped higher in March after an anemic February print, with nonfarm payrolls expanding by 196,000, according to a Bureau of Labor Statistics report released Friday. The unemployment rate held steady at 3.8%, meeting expectations.

Wage growth, often viewed as a predecessor to broader inflation throughout the economy, rose 0.14% over the month, short of the 0.3% gain expected by economists polled by Refinitiv. That brings year-over-year wage growth to 3.2%, the slowest pace of hourly earnings growth since September.

The report shows “normal service resuming and shows last month was a fluke,” said Eric Winograd, senior economist at AllianceBernstein. “Wages are going up but only gradually. Bottom line: it’s a welcome relief from last month’s” lethargic print.

“The decline in the participation rate is sort of normal,” he added. “It shouldn’t be alarming, but rather it reflects what normal looks like right now.”

Traders continued to digest the latest developments in trade negotiations between Washington and Beijing on Friday. President Donald Trump said Thursday that swift progress had been made, adding “we’ll know over the next four weeks” whether a deal can be reached.

Chinese Vice Premier Liu He, meanwhile, said new consensus had been reached by both countries on the text of a trade agreement, according to official state news agency Xinhua.

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