U.S. Treasury yields rose Thursday after July retail sales data came in surprisingly strong.
The yield on the 10-year Treasury note climbed nearly 10 basis points to 3.921%. The 2-year Treasury yield jumped more than 14 basis points to 4.093%.
Yields and prices move in opposite directions, and one basis point equals one one hundredth of a percent (0.01%).
Yields took a big leg up Thursday morning after retail sales jumped 1% in July, far above a forecast of 0.3% growth from economists polled by Dow Jones. That can be taken as a sign that consumer spending is too robust to justify fears of a recession, or even an economic slowdown.
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Concerns that the economy was headed for a slowdown were stirred two weeks ago when July nonfarm payrolls came in far weaker than Wall Street had expected.
Meanwhile, initial jobless claims statistics also released Thursday came in lower than economists anticipated, signaling firm demand for labor.
"This should help alleviate concern about the consumer after the sluggish jobs report," said Scott Helfstein, head of investment strategy at Global X. "Unemployment and household debt remain low and that fuels the consumer. This is a strong sign that the economy is still in expansion."
Money Report
The latest reports Thursday came after consumer and wholesale inflation readings earlier in the week reassured investors that the Federal Reserve has largely succeeded in its fight to contain rising prices.
The consumer price index rose 0.2% on a monthly basis and 2.9% from a year earlier in July, data released Wednesday showed. The monthly reading was in line with forecasts from economists polled by Dow Jones, while the annual rate was slightly below an expected 3% increase.
Core CPI, which strips out food and energy prices, was 0.2% higher from the previous month and rose 3.2% on an annual basis, also as expected.
That came after the producer price index, which tracks wholesale prices, on Tuesday showed a 0.1% increase in July from June, less than forecast.
The data reinforced expectations of a September interest rate cut, which is being fully priced in by markets and would see the Fed join its counterparts in the 20-nation euro zone and U.K., where central banks have already begun cutting interest rates.
