NEW YORK: US Treasuries prices rose on Thursday as data showed a setback in labor market improvement in June, raising doubts whether the Federal Reserve would end its near-zero interest rate policy later this year.
The US Labor Department said US employers added 223,000 workers last month, less than the 230,000 increase projected by economists polled by Reuters. It downgraded its readings of April and May job increases, resulting in 60,000 fewer jobs created than previously reported.
Another bleak aspect of the latest payrolls report was the no growth in wages, which analysts say would disappoint the Fed which has counted on growing paychecks to help support consumer spending and its 2 percent inflation target.
"Clearly the report was disappointing," said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania. "If we continue get this type of payrolls report again in July and August, the Fed won't move in September."
US interest rates futures rose after the June payrolls report, suggesting traders priced out the chances of a Fed rate increase this year.
Meanwhile, traders who were uncertain on the outcome of Greece's referendum on Sunday on bailout terms loaded up on safehaven US government debt ahead of a three-day weekend.
US financial markets will close on Friday for the Fourth of July holiday.
Greek Prime Minister Alexis Tsipras on Wednesday urged voters to reject the deal in an effort to force lenders to loosen austerity terms, while Eurogroup chair Jeroen Dijsselbloem said on Thursday a 'no' vote would not strengthen Greece's negotiation stance to clinch a reform-for-cash deal.
Investors hope majority of Greek voters would vote 'yes' on Sunday. This would signal the country won't exit the euro zone. Traders fear Greece leaving the economic bloc and common currency would roil financial markets.
In early US trading, benchmark 10-year Treasuries notes were up 11/32 in price, erasing losses before the payrolls data. The 10-year yield was last 2.375 percent, down 4 basis points from late on Wednesday.
The 30-year bond was up 9/32 in price after falling as much as a full point before the jobs report. The 30-year yield was last 3.178 percent, down 2 basis points from Wednesday's close.
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