U.S. Treasury yields ticked lower on Thursday as Wall Street assessed the latest employment data and looked ahead to Friday's August nonfarm payrolls report.
The yield on the 10-year Treasury slid nearly 4 basis points to 3.731%. The 2-year Treasury yield was 2 basis points lower at 3.75%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
ADP said Thursday that private payrolls rose by 99,000 in August. That is not only the smallest gain since early 2021, but it also came in well below the consensus forecast of 140,000 from economists polled by Dow Jones.
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This can bolster fears about the health of the U.S. economy as investors gear up for the big jobs data release on Friday.
Specifically, traders are awaiting closely followed data on nonfarm payrolls, unemployment and wages due Friday morning. The weaker-than-expected July jobs report prompted a wave of recession fears and market volatility, as questions about whether the Federal Reserve should have cut interest rates sooner emerged.
The data comes ahead of the next Federal Reserve meeting later this month, when the central bank is expected to cut interest rates. Uncertainty remains about the size of the rate cut.
Money Report
Weekly jobless claims declined from the prior week, according to data also released Thursday. That offers a contrast against the weakness seen in the ADP report.
On Wednesday, the 10- and 2-year Treasury yields briefly normalized, reversing the inverted yield curve, which is historically seen as a recession indicator. The 10-year yield was above the 2-year yield for the first time since June 2022. The 10- and 2-year yields remained close together on Thursday.
