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Yields Sharply Higher As Job Reports Surprises Higher

Bond yields roared back this week, with the largest advances coming following a strong labor market report on Friday.  The report indicated that the U.S. economy added 250,000 jobs during the month of October.  This advance outpaced expectations of a 200,000 job increase.  The unemployment rate held steady at 3.7% as the new jobs appeared to be taken by new entrants to the labor market.  The labor force participation rate rose from 62.7% to 62.9% - without that advance, the unemployment rate would have been pushed even lower into territory uncharted since the late 1960's. 

The combined impact of the recent hurricanes (Florence and Michael) did not appear to be significant.  Despite the increase in labor force participation, it remains near the lowest levels since the late 1970s, when women were entering the workforce in larger numbers.  Wages also rose in October, bring year-over-year increases above 3% for the first time since 2009.

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