By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices slid Friday after the unemployment rate fell to its lowest level since December 2008.
The April nonfarm payroll report showed the U.S. economy created 165,000 jobs last month, bringing the unemployment rate down a tick to 7.5% from 7.6%. The Labor Department also revised March job growth up to 138,000 from 88,000, after that initial number was taken as a sign of slowing labor growth.
As investors exited the security of the Treasury market, driving pricing down, the 10-year note 10_YEAR +4.41% yield climbed nearly 7 basis points to 1.694%. The 30-year bond 30_YEAR +2.90% yield climbed 8 basis points to 2.899% while the 5-year note 5_YEAR +6.27% yield climbed over 4 basis points to 0.695%.
The revision of the March numbers upward may be more important than the April numbers to investors in the Treasury market, according to Richard Gilhooly, U.S. director of interest rate strategy for TD Securities.
“The Treasury market has been subject to heavy selling pressure not so much from the 165k print for April, but the 114K net revision and 293k household jobs in April have certainly re-inforced the impact of the print, confirming that last month’s 88k initial print was indeed an aberration,” he said in a note.
Many in the Treasury market have recently termed the nonfarm payroll report “the mother of economic indicators” because of its implications for how the Federal Reserve may act to change its quantitative easing asset-purchase program.
The Federal Reserve said Wednesday that it is “prepared to increase or reduce” its buying depending on how the economic recovery moves forward, putting the Treasury market is on alert for signs that could move the central bank toward action.
The weakening in Treasurys “hardly seems much given the strength of this report,” said David Ader, head of rates strategy at CRT Capital Group LLC, in a note.
Ben Eisen is a MarketWatch reporter based in New York.
