Job cuts announced by U.S.-based employers surged 136% to 102,943 in the month, driven largely by layoffs at large technology firms, according to global outplacement firm Challenger, Gray & Christmas.
At the same time, initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 183,000 for the week ended Jan. 28, the Labor Department said. Economists polled by Reuters had forecast 200,000 claims for the latest week. The strength of the labor market is a key concern for the Federal Reserve, which announced a 25 basis points interest rate hike Wednesday as it attempts to bring inflation down to its target rate of 2%.
The S&P 500 rose more than 1% on Wednesday, and is now up more than 7% for the year, after Fed Chair Jerome Powell seemed to strike a more dovish tone in a press conference. Yields on the benchmark U.S. 10-year Treasury, which move inversely to prices, fell after the meeting and have declined by more than 40 basis points in 2023. "The labor market remains very tight. We expect that it will soften eventually, but it is starting from a very significant position of strength, and it will take a little while longer for the cracks to form," said Thomas Simons, money market economist at Jefferies LLC.
The yield on 10-year Treasury notes was down 3.3 basis points to 3.365%. The yield on the 30-year Treasury bond was down 2.9 basis points to 3.521%.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -71.1 basis points.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 3.7 basis points at 4.073%.
February 2 Thursday 9:32AM New York / 1432 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 4.5375 4.6533 -0.003
Six-month bills 4.615 4.7902 -0.027
Two-year note 100-28/256 4.0671 -0.043
Three-year note 100-98/256 3.736 -0.045
Five-year note 100-58/256 3.4501 -0.047
Seven-year note 100-148/256 3.4063 -0.043
10-year note 106-84/256 3.3599 -0.038
20-year bond 105-72/256 3.6233 -0.047
30-year bond 108-216/256 3.5182 -0.032
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 27.75 -0.50
spread
U.S. 3-year dollar swap 15.25 0.00
spread
U.S. 5-year dollar swap 6.50 0.50
spread
U.S. 10-year dollar swap -1.25 1.00
spread
U.S. 30-year dollar swap -36.00 2.75
spread
(Reporting by David Randall; editing by Jonathan Oatis)
