US Treasury yields rose to a one-week high after data showed that employers added more jobs than economists had expected in April, pushing bets on the next Federal Reserve rate cut back one meeting to July.
Nonfarm payrolls increased by 177,000 jobs last month after rising by a downwardly revised 185,000 in March. Economists polled by Reuters had forecast an increase of 130,000 jobs. The unemployment rate was unchanged at 4.2 percent.
“It’s a little bit of a sigh of relief from the market’s perspective that although there’s some uncertainty around what the economic outlook is, at least for now the jobs data is holding up,” said Jim Barnes, director of fixed income at Bryn Mawr Trust.
“It takes a little of the urgency off the table for the Fed to have to move,” Barnes said.
Investors are concerned that new tariffs enacted by US President Donald Trump’s administration will slow growth and lead to a renewed bout of inflation.
Fed officials including Chair Jerome Powell have also expressed concerns about renewed price pressures and a still resilient labor market will give them more room to hold rates higher for longer.
