Treasuries showed a lack of direction over the course of the trading day on Thursday, extending the lackluster performance seen in the previous session.
Bond prices spent the day lingering near the unchanged line before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.294 percent.
The choppy trading on the day came as traders remained reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists currently expect employment to jump by 750,000 jobs in August after surging by 943,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.4 percent.
The jobs report could impact the outlook for monetary policy, as Fed officials have indicated inflation has reached their target but they need to see further improvement in the labor market before they begin tapering asset purchases and raising interest rates.
A day ahead of the release of the monthly jobs report, a separate Labor Department report showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended August 28th.
The report said initial jobless claims dipped to 340,000, a decrease of 14,000 from the previous week’s revised level of 354,000.
Economists had expected initial jobless claims to edge down to 345,000 from the 353,000 originally reported for the previous week.
With the modest decrease, jobless claims fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
In other U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit narrowed in the month of July.
The Commerce Department said the trade deficit narrowed to $70.1 billion in July from a revised $73.2 billion in June.
Economists had expected the trade deficit to narrow to $71.0 billion from the $75.7 billion originally reported for the previous month.
The narrower trade deficit came as the value of exports jumped by 1.3 percent to $212.8 billion, while the value of imports dipped by 0.2 percent to $282.9 billion.
The monthly jobs report is likely to be in the spotlight on Friday, overshadowing a separate report on activity in the service sector.