NEW YORK / Content Syndication Services / — The U.S. 10-year Treasury yield moved back near 4.5 percent on Wednesday and held close to that level on Thursday, after stronger labor market readings and elevated oil prices added pressure to government bonds. The benchmark yield was around 4.49 percent on June 4, near the previous session’s 4.50 percent, according to market data, keeping borrowing costs close to one of the highest levels recorded in recent weeks.
The move followed the May ADP National Employment Report, which showed U.S. private sector employment increased by 122,000 jobs. ADP said annual pay rose 4.4 percent from a year earlier, while April’s private payroll gain was revised to 105,000. The report added to a series of labor indicators showing continued demand for workers, with hiring gains spread across several parts of the services and goods-producing economy.
Separate data from the U.S. Bureau of Labor Statistics showed job openings increased to 7.6 million in April, up by 731,000 from March. The Job Openings and Labor Turnover Survey showed hires decreased to 5.1 million, while total separations declined to 5.0 million. Quits were little changed at 3.0 million, and layoffs and discharges were little changed at 1.7 million, indicating that employers were not broadly reducing staff.
Labor data lifts yield pressure
The labor data arrived before the Labor Department’s monthly employment report for May, one of the main economic releases followed by bond traders, companies and policymakers. Treasury yields move inversely to prices, meaning yields rise when government bond prices fall. The 10-year note is widely used as a reference point for mortgage rates, corporate borrowing costs and valuations across financial markets, making movements near 4.5 percent closely watched.
Service sector data also showed continued expansion. The Institute for Supply Management said its Services PMI rose to 54.5 percent in May from 53.6 percent in April. Readings above 50 percent indicate expansion. The group’s prices index rose to 71.3 percent, its highest reading since August 2022, with diesel, gasoline, oil and related commodities among the items most frequently reported as higher in price.
Oil prices remain elevated
Oil prices remained a second source of market attention. Brent crude traded near $97 a barrel on Thursday after rising earlier in the week, while U.S. West Texas Intermediate crude traded near $95. The U.S. Energy Information Administration said U.S. crude inventories fell by 8 million barrels to 433.7 million barrels in the week ended May 29, a draw that added to attention on supply levels.
The combination of higher energy prices and firm labor readings kept fixed-income markets focused on inflation-sensitive data. Longer-dated Treasury yields reflect several factors, including economic growth, inflation, Federal Reserve policy rates and demand for safe assets. With the 10-year yield again near 4.5 percent, the bond market remained centered on incoming U.S. employment, services and energy data as investors measured current conditions across the economy.