Source: US Dept. of Treasury End of Day
• Rates moved lower last week with both the 2-year and 5-year Treasury notes decreasing by seven basis points to 4.21% and 4.36%, respectively.
• July employment data surprised to the downside, with payrolls declining 23,000 jobs and prior months revised lower, adding to evidence that labor market momentum is slowing.
• While the unemployment rate fell to 4.1%, the decline was driven by a sharp drop in labor force participation, signaling softer underlying labor market conditions.
• Private-sector hiring remained positive despite headline weakness, with healthcare and AI-related construction activity continuing to support employment growth.
• Cooling job growth, moderating wage pressures, and weaker labor force trends have increased the focus on upcoming inflation data, which could prove pivotal for the Fed's September policy decision.
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