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Treasury Traders Never Cared So Much About U.S. Workers’ Wages

Daniel Kruger

August 1, 2015 — 12:00 AM EDT

With the probability of a Federal Reserve interest-rate increase wavering with each strand of economic information, bond traders will be paying extra attention to the government’s July employment report next week to see if workers are getting raises.

Investors are seeking clues to whether Treasuries can extend the longest winning streak since January after central bank policy makers said July 29 they are looking for “some further improvement in the labor market” before raising rates for the first time since 2006. Yields tumbled Friday after a report showed worker pay in the second quarter climbed at the slowest pace on record, fueling speculation the Fed may delay liftoff until at least December.

“The most important piece of the Labor Department data will be wage growth because that’s the missing piece -- that the labor market is moving within range of maximum employment and a return to normalcy,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, one of the 22 primary dealers that trade with the Fed.

full @ http://www.bloomberg.com/news/articles/2015-08-01/treasury-traders-never-cared-so-much-about-u-s-workers-wages