Though fixed income investor did not receive much in the way of economic data on Friday, the recent climb in yields comes after a flood of news earlier this week.
On Thursday, the Labor Department said new applications for U.S. jobless benefits increased more than anticipated, but the number of Americans on unemployment fell to its lowest level since 1973.
Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 222,000 for the week ended May 12, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims rising to 215,000 in the latest week.
The latest figures add to a growing narrative that the labor market is approaching full employment with the jobless rate near a 17-year low of 3.9 percent. The Federal Reserve, which seeks to balance goals of maximum employment and stable prices, has forecast an unemployment rate of 3.8 percent by the end of the year.
Tighter labor markets are usually considered a bellwether of labor input wages in classical economics: When workers are in higher demand, employers will typically have to pay more for their services. Wages, in turn, are often seen as a prelude to higher prices throughout the economy as people spend more as their paychecks grow.
Rising inflation, which threatens Treasury prices because it erodes the purchasing power of their fixed payments, puts upward pressure on rates.