Treasury yields fell sharply on Friday following the release of a disappointing US jobs report. The report indicated weaker-than-expected job creation in December, fueling concerns about the strength of the economic recovery.

Key Highlights of the Jobs Report

• Non-farm payrolls increased by only 156,000 in December, below economists’ expectations.
• The unemployment rate remained steady at 7.8%.
• Revisions to previous months’ data were also negative, further dampening the outlook.

The weaker-than-anticipated data prompted investors to sell off stocks and flock to the safety of US government bonds, driving Treasury yields lower. The 10-year Treasury yield fell to its lowest level in several weeks.

Market Reaction

Analysts noted that the jobs report could lead the Federal Reserve to maintain its current pace of asset purchases for a longer period. Some economists suggested that the Fed might even consider additional stimulus measures if the labor market continues to struggle.

The disappointing jobs data has increased uncertainty about the economic outlook and raised questions about the sustainability of the recovery.