NEW YORK – US Treasury yields fell sharply on Wednesday, after labor market data came in weaker than expected, while a separate report on the services sector unexpectedly showed contraction.
The ADP National Employment Report showed private payrolls increased by 37,000 jobs last month, well short of the 110,000 estimate of economists polled by Reuters, after a downwardly revised rise of 60,000 jobs in April, sending yields lower.
Yields then extended their declines after the Institute for Supply Management said its non-manufacturing Purchasing Managers Index dropped to 49.9 last month, below the 52.0 estimate of economists polled by Reuters. The reading was the first below the 50 threshold, which indicates contraction of the services sector, and the lowest reading since June 2024.
In addition, the ISM’s measure of prices paid for services inputs rose to 68.7, the highest level since November 2022, from 65.1 in April.
