Yields ended the week higher, closing a volatile week driven by geopolitical events and economic data. Markets opened the week recovering some of the yield lost by the temporary flight to safety which followed the US strike in Iraq. Mid-week, the Iranian reprisal triggered another round of safe haven buying, although that move quickly reversed. The market's attention then moved towards economic data, primarily December's monthly jobs report.
The report indicated that the economy added 145k jobs during the month, keeping the unemployment rate steady at 3.5%. While the job gain was below expectations, one encouraging component of the report was the U-6 unemployment rate of 6.7%. That measure, which adds in discouraged workers and part-timers who want full-time jobs, is now at its lowest level in the 26-year history of the data set, indicating broad-based labor market strength.