By Daniel Kruger
U.S. government bond prices fell Friday after data showing the economy added far more jobs than expected.
The yield on the benchmark 10-year Treasury note rose for a third consecutive trading session, settling at 1.842% from 1.791% before the report and from 1.795% Thursday, according to Tradeweb.
Yields, which climb when bond prices decline, rose after the Labor Department said employers added 266,000 workers to their payrolls last month and unemployment matched a 50-year low of 3.5%. The gains topped the 187,000 increase predicted by economists surveyed by The Wall Street Journal, exceeding forecasts by the most since January.
The report offers reassurance to investors, who spent much of the year concerned about a global economic slowdown and uncertain progress toward resolving trade tensions between the U.S. and China. Its strength was particularly surprising after other indicators earlier in the week, such as tepid data on the services sector presented a less positive assessment of the economy.
"It goes against other indicators that have said the economy was slowing, " said Gary Pollack, head of fixed-income trading at Deutsche Bank Private Wealth Management. While the data was good, it was unlikely to alter an environment that has supported low bond yields.
While the job growth exceeded expectations, the data still signaled muted inflation. Average hourly earnings have risen 3.1% from a year ago, though they increased just 0.2% in November.
Low borrowing costs and expectations for the Fed to hold interest rates steady suggest corporate bonds and other "risk assets in these circumstances should perform better," Mr. Pollack said.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose 0.1% to a recent 90.63.
Write to Daniel Kruger at Daniel.Kruger@wsj.com