Jobless Numbers Come in at a 49-Year Record

​Labor figures released last week showed a nearly full labor market. The unemployment rate fell to 3.7%, wages grew at a controlled 2.8%, and jobless claims were near levels not seen since 1969. However, the impressive jobs report spooked bond investors about future rate hikes by the Fed, prompting a bond market selloff that sent yields to seven-year highs.

• The Bureau of Labor Statistics released its monthly employment situation report and the figures showed a historically low unemployment rate. The rate fell to 3.7%, the lowest since 3.5% in December of 1969. However, the jobs market added only 134,000 jobs, falling far short of economists’ expectations for 180,000 jobs. The softer job growth can be partially attributed to the effects of Hurricane Florence, and as a result is expected to recover. Wages grew at 2.8% year over year, confirming the Fed’s view that inflation is under control.

• Jobless claims also fell to a nearly fifty-year low. The number of Americans filing for unemployment benefits fell 8,000 to 207,000 for the week ended September 29th. Claims were forecasted at 213,000, however, Hurricane Florence may have impacted some Americans’ ability to file for claims, leading to a figure slightly below expectations. Figures for the week ended September 15th were revised to show 202,000 jobless claims, the lowest since the Fall of 1969.
  

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• The ten-year U.S. treasury bill yield jumped to a seven-year high after the unemployment rate fell to a 49-year low. The ten-year rate climbed approximately 15 basis points through the week, ending at 3.233% at market close on Friday. The strong unemployment figures encourage potential rate hikes from the Fed, which prompted a selloff in the bond market, leading to the seven-year-high yield.