By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices made slight gains Monday, nudging yields slightly lower, after an economic report showed U.S. consumer spending rose 0.5% in January, while personal income increased 0.1%.
Yields on 10-year notes (UST10Y 3.60, -0.01, -0.22%) fell 1 basis point to 3.61%. Yields move inversely to prices and a basis point is 0.01%.
Yields on 2-year notes (UST2YR 0.80, -0.01, -0.99%) eased 1 basis point to stand at 0.80%.
The spending figure was a little higher than expected by economists surveyed by MarketWatch. However, the income gain was much smaller than had been seen and the savings rate declined, leading analysts to question whether spending will hold up. See more on spending, income report.
"January saw a return to 'normal' consumption patters on the part of U.S. consumers; financing spending out of something other than income gains," said Dan Greenhaus, chief economic strategist at Miller Tabak. "This of course is unsustainable in a world with less debt and fewer jobs but certainly can be realized in any given month."
The report's measure on inflation also rose modestly, a relief for bondholders and higher inflation erodes the value of fixed-income payments.
"The inflation component was benign so that helps," said strategists at CRT Capital Group.
