The Labor Department's September jobs report could have a major impact on the recent surge in Treasury bond yields are market remain fixated on renewed inflation pressures.
The Labor Department will publish perhaps the most important monthly employment report of the year Friday as investors remain gripped by movements in the bond market amid concerns that a resilient job market will stoke inflation pressures and trigger more Federal Reserve rate hikes.
That anticipated labor market cooling, however, has defied recent moves in the bond market, where benchmark 10-year Treasury bond yields have surged more than 55 basis points over the past five weeks as markets adjust to the 'higher-for-longer' interest rate signals from the Fed, based in part on labor market resilience.
"The bigger picture is that private job growth has dropped markedly from late 2021, when payroll growth ranat about 700K during the Great Rehiring, and it appears stillto be slowing, albeit gradually," said Ian Shepherdson of Pantheon Macroeconomics."In any event, the Fed, however, cares more about the unemployment rate than the monthly payroll numbers,because the former captures the net effect of movementsin labor demand and supply, and that’s what mattersfor future wage growth.
Other reports, including Challenger Gray & Christmas' monthly tally of overall job cuts, showed September layoffs fell 37% from August to 75,151, taking the third quarter total to around 146,300.
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