Bonds fall on mixed economic reports

U.S. Treasury bond prices fell Friday as investors weighed conflicting readings on the health of the nation's economy.

The benchmark 10-year note fell 11/32 to 101 12/32 and its yield rose to 3.82% from 3.78% late Thursday. Bond prices and yields move in opposite directions.

The 30-year long bond slipped 27/32 to 101 7/32 lifting its yield to 4.42% from 4.37%.

The 2-year note held steady at 100 with a yield of 2.36%. And the recently auctioned 5-year note sank 1 10/32 to 100 5/32 yielding 3.09%.

Bond prices fell Thursday after the government revised second-quarter gross domestic product higher.

The nation's gross domestic product, the broadest measure of economic activity, rose at an annual rate of 3.3% in the second quarter, according to a revised reading from the Commerce Department.

The revision surpassed the consensus estimate of 2.7% anticipated by economists polled by Briefing.com. Economic growth between 2.5% and 3.5% is typically seen as normal for a healthy economy.

Thursday's report, "suggested the economy was stronger than previously thought," said Gregory Miller, chief economist at Sun Trust Banks in Atlanta.

But more recent data out on Friday, "suggest that GDP strength may have been illusory."

The Commerce Department said Friday that individual income decreased by 0.7% in July after a 0.1% jump in June and a 1.8% increase in May.

Economists polled by Briefing.com were expecting income to fall by 0.2% in July.

Still, the decrease was expected as personal income had surged in the prior two months because of $90 billion in economic stimulus payments