Treasury Yields Vary

Published January 3, 2025

U.S. Treasury yields fluctuated early in the holiday week as investors waited for the release of the latest economic data for the manufacturing sector. Yields traded lower towards the end of the week as the number of applications for unemployment benefits dropped to the lowest level in the last eight months.

On Friday, the Institute for Supply Management (ISM) released its purchasing managers’ index (PMI) for December, which measures the change in production levels across the U.S. and is used as an indicator of U.S. economic activity. The PMI for December was 49.3%, up from a PMI of 48.4% in November and above analysts’ forecast of 48.4%. A manufacturing PMI above 42.5% typically evidences an expansion in the overall economy.

“The overall economy continued in expansion for the 56th month after one month of contraction in April 2020,” said Chair of the ISM’s Manufacturing Business Committee, Timothy R. Fiore. “U.S. manufacturing activity contracted again in December, but at a slower rate compared to November. Demand showed signs of improving, while output stabilized and inputs stayed accommodative.”

The benchmark 10-year Treasury note yield opened the week of December 30 at 4.63% and traded as high as 4.60% on Thursday. The 30-year Treasury bond opened the week at 4.82% and traded as high as 4.82% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 9,000 to 211,000 for the week ended December 28. Continuing unemployment claims dropped by 52,000 to 1.84 million.

“Businesses hired fewer employees in 2024 than they did in 2023 and 2022, leading to the persistent increase in continuing claims in 2024,” said senior economic advisor at PNC Financial, Stuart Hoffman. “But the economy is still creating roughly enough jobs to keep up with labor force growth.”

The 10-year Treasury note yield finished the week of 12/30 at 4.60%, while the 30-year Treasury note yield finished the week at 4.81%.