Treasury yields drop on unexpected spike in first-time claims for jobless benefits

Treasury yields drop on spike in jobless claims

NEW YORK — Interest rates in the Treasury market slid Thursday after the government said first-time claims for jobless benefits rose unexpectedly last week.

The price of the 10-year note rose 40.63 cents to $105, while its yield dropped to 2.91 percent from 2.96 percent late Wednesday. That yield helps set interest rates on mortgages and other kinds of loans.

The Labor Department said initial claims for unemployment benefits jumped to 479,000 last week from a 460,000 a week earlier. Economists polled by Thomson Reuters had forecast new claims would fall modestly to 455,000.

The high unemployment rate in the U.S. remains one of the biggest worries for investors.

Also Thursday, monthly retail sales reports showed shoppers remain skittish about spending. Costco Wholesale Corp. and Limited Brands Inc. both reported big jumps in July sales, but that was compared with weak results a year ago.

Investors will get a stronger reading on the economy on Friday when the government releases its closely watched monthly tally of payrolls and the unemployment rate.

In other trading, the yield on the two-year note fell to 0.54 percent from 0.57 percent. Its price added 6.25 cents to $100.156.

The yield on the 30-year bond dropped to 4.05 percent from 4.08 percent, while its price rose 53.13 cents to $105.531.

The yield on the three-month Treasury bill was unchanged at 0.14 percent. Its discount rate was 0.14 percent.