Bond prices recorded the biggest one-day jump in more than six months on Friday, propelled by grim employment figures and clear signs that the Federal Reserve moved to ease interest rates.
The Treasury's bellwether 30-year bond leaped 1 3/4 point, or $17.50 per $1,000 in face amount. Its yield, which falls when prices rise, plunged to 8.18 percent from 8.33 percent late Thursday.The sharp price rise in the long-term bond was the largest since June 1. Back then, yields on the 30-year bond dropped to 8.44 percent from the previous day's close of 8.57 percent.
This time around economists were expecting bad tidings in Friday's monthly report, but the news was worse than expected.
The nation's unemployment rate shot up to a three-year high of 5.9 percent in November, creating the worst two-month loss since the depths of the 1981-82 recession, the Labor Department said.
The number of jobless has swelled by 900,000over five months. Nearly all of the nation's industries lost jobs last month as payrolls fell by 267,000.
"Everybody was shocked. People got a touch spooked and said, `the Fed is going to ease on this,"' said Mike Casey, international economist at Maria Ramirez Capital Consultants in New York.
The market jumped on speculation that the Fed (Federal Reserve System) would ease interest rates to stimulate the economy, a move that generally gives a lift to bond prices.