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The US economy added 256,000 jobs in December, beating expectations and sending yields on a long-term increase in US government debt to the highest level since November 2023.
The Bureau of Labor Statistics figure on Friday beat the expectation of 160,000 among economists polled by Reuters, and was above a downwardly revised figure of 212,000 positions added in November.
Treasury yields rose as investors bet the Federal Reserve will cut interest rates more slowly this year. Futures markets pushed back the expected timing of the first rate cut by a quarter of a point to September from June, ahead of the data release.
The two-year Treasury yield, which tracks expectations for interest rates and moves inversely to bond prices, rose 0.11 percentage points to 4.37 percent. The benchmark yield on 10-year bonds rose 0.09 percentage points to 4.77 percent.
Stock contracts fell, with contracts tracking the S&P 500 down 0.8 percent. The dollar rose 0.4 percent against a basket of six other currencies.
Friday’s figures showed the unemployment rate was 4.1 percent, compared with 4.2 percent in November.
The jobs The December data comes amid a sell-off in the global government bond market, fueled in part by rising expectations that the Fed will cut interest rates only slightly in 2025.
The central bank forecast just two quarter-point rate cuts in December this year, compared to a projection of four in September, due in part to persistent strength in the labor market.
President-elect Donald Trump’s plans to cut taxes, impose tariffs and crack down on immigration have also led to Fed signal that they will be more cautious in 2025.
Jeff Schmid, a senior Fed official, he said on Thursday that the US central bank was “pretty close” to meeting its inflation and employment targets, underscoring expectations that policymakers will refrain from sharp interest rate cuts this year.
The Fed began cutting its key interest rate in September, cutting it by 1 full percentage point until the end of 2024.
The US central bank is expected to keep interest rates at a target range of between 4.25 percent and 4.5 percent at its next meeting later this month.
This is a developing story
