Treasury yields climbed after data showed U.S. homebuilding surged to a 13-year high in December.
Housing starts jumped 16.9% to a seasonally adjusted annual rate of 1.608 million units last month, the highest level since December 2006. The percentage gain was the largest since October 2016.
Earlier this week, investors also cheered strong retail sales data, while weekly jobless claims came in better than expected as well.
Industrial production, however, fell 0.3%in December on the warm winter weather that caused utility output to drop a sharp 5.6% in December. Meanwhile, job openings dropped in November to 6.8 million from 7.361 million in October.
The U.S. and China signed the long-awaited phase one trade deal on Wednesday. Under the agreement, China is set to buy an additional $200 billion in U.S. goods over the next two years.
China reported Friday that its economy expanded by 6.1% in 2019 even amid a trade dispute with the U.S., matching expectations.
Philadelphia Fed President Patrick Harker and Fed Vice Chair Randal Quarles will also comment on the world's largest economy at separate events.
There are no major U.S. Treasury auctions scheduled on Friday.
— CNBC's Huileng Tan contributed to this report.