Treasury yields fall as investors brace for August jobs report

U.S. Treasury yields were lower on Friday as investors geared up for the release of the August jobs report as concerns about an economic slowdown have been growing.

At 4:10 a.m. ET, the yield on the 10-year Treasury was down by over two basis points to 3.7042%. The 2-year Treasury yield was last more than three basis points lower to 3.7165%.

Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.

Investors looked to the all-important August jobs report, which comes amid concerns about the state of the economy and labor market. Economists surveyed by Dow Jones are expecting the report to show that nonfarm payrolls increased by 161,000 in the month, and that the unemployment rate eased slightly to 4.2%.

That comes after data released Thursday showed that private payrolls grew by 99,000 in August, far lower than the 140,000 estimate. The figures renewed concerns about an economic downturn and a softening labor market, which were first prompted by July’s weaker-than-expected jobs report.

Weekly initial jobless claims meanwhile fell from the previous week, figures that were also released Thursday showed.

The data comes ahead of the next Federal Reserve meeting, which is set to conclude with an interest rate decision on Sept. 18. Markets are expecting the Fed to cut rates then, and were last pricing in a 57% chance of a 25-basis-point rate cut and a 43% probability of a 50-basis-point cut, according to CME Group’s FedWatch tool.

Investors will be looking closely at economic data releases until then, including Friday’s jobs data and inflation figures slated for next week, for clues about the path ahead for Fed policy and interest rates.