(RTTNews) - Treasuries are seeing considerable strength in morning trading on Friday, as traders react to disappointing jobs data that has led to renewed concerns about the economic outlook.
Bond prices moved sharply higher in early trading and have remained firmly in positive territory since then. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.8 basis points at 2.038 percent.
With the steep drop, the ten-year yield has pulled back near the record intraday low set earlier this month and is on pace to set a record closing low.
The strength among treasuries comes on the heels of the release of a report from the Labor Department showing a lack of job growth in the month of August.
The report said non-farm payroll employment was unchanged in August compared to a downwardly revised increase of 85,000 jobs in July. Economists had been expecting employment to increase by about 60,000 jobs compared to the addition of 117,000 jobs originally reported for the previous month.
At the same time, the Labor Department said that the unemployment rate held at 9.1 percent, unchanged from the previous month and in line with economist estimates.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Nevertheless, the broad message is that even if the U.S. economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."
The lack of job growth during the month came as a modest increase in private sector employment was offset by another drop in government jobs. A strike by workers 45,000 Verizon workers also contributed to the disappointing data.
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