US jobs report beats forecasts, boosts Fed hike odds
4.4 Macro US October jobs report beat forecasts, boosting Treasury yields and raising odds of a Fed rate hike, as 165,000 jobs were added and unemployment fell to 4.1%.
The October jobs report in the United States far exceeded expectations, with 165,000 jobs created versus the 59,000 forecast. The unemployment rate dropped to 4.1%, and revisions to previous months added another 84,000 jobs, challenging the narrative of a weakening labor market. This robust performance pushed Treasury yields higher: the 10-year bond surpassed 4.88%, the 2-year reached 4.537%, and the 30-year climbed to 5.277%. As a result, market expectations for a Federal Reserve rate hike in December increased from 70% to 80%. The report reinforced expectations that the Fed will maintain a restrictive monetary policy. Traders now anticipate that bond yields could remain elevated and the dollar may see increased volatility. Job gains were led by professional services, healthcare, and transportation, while labor force participation rose to 61.9%.
