Yields Nudge Lower After Record-High Job Openings in August

Benchmark U.S. Treasury yields nudged lower after the Labor Department revealed that the number of job openings in August hit a record high. According to the data, 7.1 million job openings were available on the last business day of August.

The benchmark 10-year yield went down to 3.16, while the 30-year yield dropped to 3.335. In addition, short-term yields showed the 2-year ticking lower to 2.87 and the 5-year to 3.02.

Furthermore, the latest report by the Bureau of Labor Statistics showed the unemployment dropped to a 50-year low of 3.7% percent, while average hourly earnings rose by 8 cents, which matched the gain in August.

“The report has been trending higher for a long time now, so I think the markets got immune to a lot of these prints, but I’d like to think the overall data is still fantastic, because the quit rate was higher in the low-wage categories such as leisure and hospitality,” said Thierry Wizman, global interest rates and currencies strategist at Macquarie Group.

“There was always sort of a problem trying to fill skilled labor, but now it looks like it’s getting a bit more problematic to fill even the lower-paying positions,” Wizman added.

Short-Term Bond Options

The latest jobs data comes as Treasury yields have been climbing, causing investors to flock to shorter-duration debt issues as opposed to those with longer maturities.

“In fixed income, short term duration continues to be the bell of the ball as more money flowed into the space.,” said Brian Gilman, ETF Sales & Trading at Virtu Financial.

Investors can limit exposure to long-term debt issues and focus on maturity profiles. An example would be the SPDR Portfolio Short Term Corp Bd ETF (NYSEArca: SPSB), which seeks to provide investment results that correspond to the performance of the Bloomberg Barclays U.S. 1-3 Year Corporate Bond Index.