US Jobs Report Exceeds Expectations, Fueling Interest Rate Hike Bets

The US jobs report exceeded expectations on Friday, with 162,000 new nonfarm payrolls added in August. Economists polled by Reuters had forecasted a rise of 56,000 after July's downwardly revised drop of 23,000. The unemployment rate remained steady.

Treasury yields and the dollar rose as investors bet on a September interest rate hike by the Federal Reserve. Two-year yields led the increase, jumping 4 basis points to 4.37%, while 10-year Treasury notes climbed nearly 2 basis points to 4.78%. The yield on two-year Treasuries briefly reached its highest level since January 2025.

Bret Kenwell, a US investment analyst at eToro in New York, said that the labor market's resilience means inflation remains the bigger concern. He predicted investors will closely watch next week's consumer prices report before the Fed's mid-September decision.