Wednesday, December 24, 2008

BOND REPORT: Treasurys Tread Water; Data Underscore Economic Weakness

By Deborah Levine

Treasury prices traded mostly flat ahead of the Christmas holiday Wednesday, after government reports on joblessness and consumer spending pointed to ongoing strains in the U.S. economy.

Two-year note yields (UST2YR) were little changed at 0.90%, recovering from their earlier decline.

Ten-year note yields (UST10Y) were also little changed at 2.19%.

Initial claims for unemployment benefits rose 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, marking the highest level seen for first-time claims since 1982.

A separate report showed a decline of 0.6% in consumer spending during November, though economists surveyed by MarketWatch had been looking for a drop of 0.7%. A measure of consumer inflation excluding energy and food prices was flat in November, as predicted.

Another government report indicated durable-goods orders fell 1% last month, a better performance than the 3% drop that had been forecast.

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