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Bonds surge on jobs data
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September 3, 1999: 9:10 a.m. ET
Treasury yields fall as August payrolls, wages show mild gains
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NEW YORK (CNNfn) - Treasury bond prices soared more than a point Friday after a weaker-than- expected August employment report eased concerns about rising inflation.
With a modest rise in both average hourly earnings and job creation, investors rushed to buy bonds, signaling momentary relief over rising inflation that has haunted markets all week.
Just before 9 a.m. ET, the price of the 30-year Treasury bond rose 1-14/32 to 101-12/32. Its yield, which moves inversely to the price, fell to 6.02 percent from 6.12 percent Thursday.
In the week's most closely watched economic indicator, the Labor Department said 124,000 non-farm jobs were added in August, well below forecasts. Average hourly earnings rose a mere 2 cents, below the anticipated 5 cents. The unemployment rate fell to 4.2 percent, matching a 30-year low.
While the number is consistent with tight labor markets, bond traders took relief in the small increase in wages and the limited number of jobs creation.
The relief comes after a series of reports showing economic strength in housing, factory orders and manufacturing led to a five-day bond sell-off.
Still, despite the weaker report, a series of negatives still confront the bond market, including a weakening dollar, rising commodity prices, and fears over a large calendar of new corporate bonds scheduled for sale in September
Dollar edges up
The dollar moved higher Friday morning. Just before 9 a.m. ET, the dollar rose to 109.94 yen from 109.12 Thursday, a 0.74 percent rise in the dollar's value. The dollar got some support after Japanese Finance Minister Kiichi Miyazawa said Tokyo would intervene to stop the strengthening yen if necessary and that it did not need to wait for the Group of Seven meeting later this month to seek .
It cost $1.0615 to buy one euro compared with $1.0690 Thursday, a 0.70 percent rise in the dollar's value.
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