BLBG: Treasuries Decline as U.S. Unemployment Claims Decrease More Than Forecast
Treasuries declined as U.S. initial claims for unemployment benefits fell last week more than forecast, bolstering speculation the economic recovery is building momentum.
Yields on the 10-year note increased four basis points, or 0.04 percentage point, to 3.52 percent at 8:54 a.m. in New York, according to BGCantor Market Data.
“Treasuries are at the top of the recent range -- we won’t see a significant breakout from that until tomorrow’s payroll figures,” said Guy LeBas, chief fixed-income strategist and economist at Janney Montgomery Scott LLC in Philadelphia, before the claims report.
Bonds briefly trimmed losses as European Central Bank President Jean-Claude Trichet signaled that officials remain concerned about rising consumer prices even if interest rates are appropriate for now and data showed the drop in jobless claims was led by states that were affected by storms in prior weeks.
Treasuries fell yesterday as the government said it will sell $72 billion of notes and bonds next week and a private report indicated data tomorrow may show the economy added jobs in January. Federal Reserve Governor Elizabeth Duke said the slowdown of inflation may be about to end. Data today on services industries are forecast to show the biggest part of the U.S. economy is growing.
Applications for jobless benefits decreased by 42,000 to 415,000 in the week ended Jan. 29, Labor Department figures showed today. Economists forecast claims would fall to 420,000, according to the median estimate in a Bloomberg News survey. The total number of people receiving unemployment insurance and those collecting extended payments decreased.
Payrolls Report
U.S. payrolls increased by 143,000 last month, after a 103,000-job gain in December, according to economists surveyed by Bloomberg before a Labor Department report tomorrow. The data may also show the unemployment rate increased to 9.5 percent from 9.4 percent, according to the surveys.
The Institute for Supply Management’s non-manufacturing gauge was 57.2 last month, compared with December’s 57.1 reading, the highest since May 2006, according to a Bloomberg survey of economists. A number above 50 signal expansion for the index, which covers about 90 percent of the economy. The data is due at 10 a.m. New York time.
To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
