Bond Market Update

Data Recon

• Initial jobless claims for the week ending May 30 increased by 13,000 to 225,000 (Briefing.com consensus: 216,000). Continuing jobless claims for the week ending May 23 decreased by 8,000 to 1.777 million.
  • The key takeaway from the report is that there isn't any concerning key takeaway. Granted, initial jobless claims—a leading indicator—were up from the prior week, but they remain at levels that are consistent with an otherwise solid labor market.
• First quarter productivity was revised down to 0.3% (Briefing.com consensus: 0.8%) from the preliminary estimate of 0.8%. Unit labor costs were revised down to 1.8% (Briefing.com consensus: 2.3%) from the preliminary estimate of 2.3%.
  • The key takeaway from the report is the understanding that productivity has picked up nicely from a year ago (+2.8%), while unit labor costs (+0.5%) have come down, tempering concerns about labor-based inflation pressures.
• Yield check:
  • 2-yr: -5 bps to 4.04%
  • 3-yr: -6 bps to 4.08%
  • 5-yr: -5 bps to 4.17%
  • 10-yr: -3 bps to 4.46%
  • 30-yr: -2 bps to 4.97%