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Treasuries Move To The Downside As Jobless Claims Continue To Decline

After ending the previous session slightly lower, treasuries saw further downside over the course of the trading day on Thursday.

Bond prices saw initial weakness and remained firmly negative throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 1.610 percent.

The weakness among treasuries came after the Labor Department released a report showing weekly jobless claims once again fell to a new pandemic-era low.

The Labor Department said initial jobless claims slid to 406,000 in the week ended May 22nd, a decrease of 38,000 from the previous week's unrevised level of 444,000. Economists had expected jobless claims to dip to 425,000.

Jobless claims decreased for the fourth consecutive week, once again falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.

A separate report from the Commerce Department showed an unexpected pullback in durable goods orders in April, although the decrease was largely due to a steep drop in orders for transportation equipment.

The report showed durable goods orders tumbled by 1.3 percent in April after jumping by an upwardly revised 1.3 percent in March.

The pullback surprised economists, who had expected durable goods orders to climb by 0.7 percent compared to the 0.8 percent increase that had been reported for the previous month.

Excluding a 6.7 percent slump in orders for transportation equipment, however, durable goods orders shot up by 1.0 percent in April after spiking by 3.2 percent in March. Economists had expected 0.8 percent growth.

The Commerce Department also released a report showing the pace of U.S. economic growth in the first quarter was unrevised from the advance estimate.

The report showed real gross domestic product spiked by 6.4 percent in the first quarter, unchanged from the estimate provided last month. Economists had expected a modest upward revision in the pace of GDP growth to 6.5 percent.

Meanwhile, a report released by the National Association of Realtors showed pending home sales in the U.S. unexpectedly tumbled to their lowest level in nearly a year in the month of April.

Trading on Friday is likely to be driven by reaction to the reading on inflation included in the Commerce Department's report on personal income and spending.

The inflation reading is said to be preferred by the Federal Reserve and could have a significant impact on the outlook for monetary policy.

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