Bonds Prices Rise
NEW YORK (AP) _ Bond prices rose Friday as the September unemployment report indicated wage inflation remains under control.
The price of the benchmark 10-year Treasury note rose 7/32 point, or $2.19 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 5.82 percent compared with late Thursday’s 5.85 percent.
The 30-year Treasury bond rose 22/32 point while the yield fell to 5.85 percent, down from 5.90 percent on Thursday, according to Bridge Telerate news service.
Shorter-term Treasury securities rose 1/32 point while intermediate securities rose 7/32 point.
Bond trading ended about three hours earlier than normal on Friday as traders got a head start on Monday’s Columbus Day holiday, when the bond market will be closed for the whole day.
Bond prices were boosted by the government’s report that the unemployment rate fell to 3.9 percent in September from 4.1 percent the previous month.
Many analysts had predicted the jobless rate would hold steady at 4.1 percent.
But even with the solid job growth, average hourly earnings rose only 0.2 percent in September, down from a 0.4 percent increase in August.
That was welcome news for bond prices which are eroded by inflation.
Yields on three-month Treasury bills were 6.22 percent with a discount rate of 6.05 percent, down 0.01 percentage point from Thursday’s level. Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
Six-month yields rose to 6.32 percent while the discount edged higher by 0.01 percentage point to 6.05 percent. One-year yields rose to 6.05 percent with a discount of 5.74 percent, up 0.02 percentage point from Thursday.
The federal funds rate, the interest on overnight loans between banks, fell to 6.44 percent compared with late Thursday’s 6.56 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds was unchanged at 98 1/8 with an average yield to maturity of 5.83 percent, also unchanged.