Long-maturity Treasury yields fell slightly on Friday after March jobs report showed a surge in layoffs, giving a hint at the economic damage caused by the coronavirus crisis.
The yield on the benchmark 10-year Treasury note fell 3 basis points to 0.59% while the yield on the 30-year Treasury bond was also lower at 1.23%. Bond yields move inversely to prices. The 10-year yield has fallen 12 basis points this week.
The Labor Department said Friday U.S. payrolls fell by 701,000 in March, marking the first decline in jobs since September 2010. Economists surveyed by Dow Jones had been looking for a payroll decline of 10,000.
The unemployment rate rose to 4.4% from 3.5% as employers just began to cut payrolls ahead of social distancing practices that shut down large swaths of the U.S. economy in order to stop the virus’s spread.
Still, the jobs report didn’t capture the full damage from the virus as the surveys were conducted during the week ending March 12, which came before government-mandated shutdowns went into full effect.
“Since the release, we have seen remarkably little price action in US rates, suggesting that even worse was expected (and will eventually be seen),” Ian Lyngen, head of U.S. rates at BMO, said in a note.
The number of confirmed COVID-19 cases worldwide topped 1 million Thursday night, with the total death toll rising to more than 53,000. The U.S. recently surpassed China as the country with the most reported cases in the world.
The fall in U.S. yields comes as investors are fleeing stocks, with European shares declining in early trade and U.S. futures pointing to declines. Fears over the impact of COVID-19 on the global economy have weighed heavily on investor sentiment.
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