US economy smashes expectations with 256,000 jobs created in December
The US economy created 256,000 jobs in December, smashing expectations and sending yields on long-term US government debt to the highest level since 2023.
The figure from the Bureau of Labor Statistics on Friday exceeded expectations of economists polled by Reuters of 160,000, and was above the downwardly revised figure of 212,000 positions added in November.
Treasury yields climbed as investors bet that the Federal Reserve will be slower to cut interest rates this year. Futures markets pushed back the expected timing of the first quarter-point rate cut to September from June before the data release. The odds of a second cut this year fell to around 20 per cent from roughly 60 per cent.
The two-year Treasury yield, which tracks expectations for interest rates and moves inversely to bond prices, rose 0.11 percentage points to 4.37 per cent. The benchmark 10-year yield climbed 0.09 percentage points to 4.77 per cent — the highest level since November 2023.
Stock futures fell, with contracts tracking the S&P 500 down 0.8 per cent. The dollar climbed 0.4 per cent against a basket of six other currencies.
