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Treasury Yields Fall After Disappointing Jobs Report

Source: NYSE

Treasury yields dipped on Friday as investors digested a disappointing November jobs report.

The yield on the benchmark 10-year Treasury note traded down 9 basis points at 1.358% at around 4:00 p.m. The yield on the 30-year Treasury bond was 7 basis points lower at 1.69%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Nonfarm payrolls increased by just 210,000 for the month of November, the Labor Department said Friday. That compares to a Dow Jones estimate of 581,000 jobs for the month.

The big miss came even as the labor force participation rate increased for the month to 61.8%, its highest level since March 2020.

However, the unemployment rate fell sharply to 4.2%, versus an expectation of 4.5%.

Meanwhile, some investors took solace in the fact that wage growth wasn't as hot as feared. Average hourly earnings rose 0.3% month over month and 4.8% year over year. Economists were expecting a month-over-month gain of 0.4% and year-over-year jump of 5%.

"The easing of wage pressures will incrementally take pressure off the Fed, although we don't see this report derailing accelerated tapering in the event CPI is strong next week," Ian Lyngen, BMO's head of U.S. rates, said in a note.

Federal Reserve officials have indicated that the monetary support they provided to rescue the economy from the pandemic could be coming to an end sooner than expected.

In congressional testimony earlier in the week, Fed Chairman Jerome Powell said he expects the central bank's policy committee to discuss at its meeting its month stepping up the level at which it is tapering its monthly bond purchases. Powell said he sees the unwinding to conclude "a few months" sooner than expected, a move that would open the possibility for interest rate hikes.

There are no auctions scheduled to be held on Friday.

CNBC's Yun Li and Hannah Miao contributed to this market report.

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