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Treasury Yields Vary

Published February 7, 2025

U.S. Treasury yields varied throughout the week as markets reacted to the latest economic data on the services sector and anticipated the latest nonfarm payrolls released on Friday. Yields rose at the end of the week as the latest jobs data showed the unemployment rate fell in January.

On Wednesday, the Institute for Supply Management (ISM) released its Services purchasing managers’ index (PMI) for January indicating growth in the service industry. The PMI measures the change in economic activity in the services sector and is used as an indicator of U.S. economic activity. The PMI for January was 52.8%, down from a PMI of 54.0% in December and below economists’ estimates of 54.3%.

“January was the second month in a row with all four subindexes that directly factor into the services PMI — business activity, new orders, employment and supplier deliveries — in expansion territory,” said chair of the ISM services business survey committee, Steve Miller. “Poor weather conditions were highlighted by many respondents as impacting business levels and production. Like last month, many panelists also mentioned preparations or concerns related to potential U.S. government tariff actions; however, there was little mention of current business impacts as a result.”

The benchmark 10-year Treasury note yield opened the week of February 3 at 4.54% and traded as low as 4.40% on Wednesday. The 30-year Treasury bond opened the week at 4.79% and traded as low as 4.62% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 11,000 to 219,000 for the week ending February 1. Continuing unemployment claims rose by 36,000 to 1.89 million. On Friday, the Bureau of Labor Statistics released its monthly jobs report for January which indicated the unemployment rate fell to 4% in January, from 4.1% in December. The report also noted an increase of 143,000 jobs in January, below economists’ forecasts of 169,000.

“Today’s jobs report has likely taken a March rate cut off the table,” said chief global strategist at Principal Asset Management, Seema Shah. “Aside from a slightly disappointing headline payrolls number, the broader picture is still one of labor market resilience and sustained wage pressures.”

The 10-year Treasury note yield finished the week of 2/3 at 4.50% while the 30-year Treasury note yield finished the week at 4.69%.