Treasury Yields React to Economic Data and Geopolitical Developments
Market Activity
The yield on the 10-year Treasury decreased by over 3 basis points, settling at 4.144%. Concurrently, the 2-year Treasury note saw an increase of less than a basis point, reaching 3.476%. The 30-year bond yield also experienced a decline, falling by more than 4 basis points to 4.819%. A basis point is equivalent to 0.01%, with yields and prices exhibiting an inverse relationship.
Economic Data Releases
Treasury yields adjusted following the release of new economic data. ADP reported that private payrolls increased by 41,000 in December 2025. This figure was lower than the 48,000 increase economists polled by Dow Jones had forecast. However, the December figure marked a reversal from the 29,000 decline recorded in November.
The Bureau of Labor Statistics also reported a reduction in job openings, which decreased by 303,000 from October to stand at 7.15 million in November 2025. This represents the lowest level since September 2024.
Conversely, the service sector demonstrated growth, with the ISM services index rising to 54.4% in December 2025. This indicates a 1.8 percentage point increase from November and surpassed the Dow Jones consensus estimate of 52.2%.
Analysis and Outlook
Observations from Comerica Wealth Management's Chief Investment Officer, Eric Teal, indicated a prior weakening in the labor market. However, a pickup in hiring within the hotel and restaurant industries has been noted, which may be linked to a continued decrease in immigration. Hiring in the healthcare sector has maintained resilience, potentially counteracting job reductions resulting from artificial intelligence adoption.
Investors are currently anticipating the release of Friday's payrolls report, with economists projecting an addition of 54,000 new jobs for December. Additionally, geopolitical factors, including ongoing tension in Venezuela and developments concerning Greenland, are being monitored by investors.