Demand for U.S. Treasury notes fell on Friday after an unexpectedly small decline in jobs reduced concern over a deep and prolonged recession, cutting demand for U.S. debt.

The U.S. Labor Department reported that jobs fell for the fourth consecutive month but at a much slower rate than before. About 20,000 jobs were lost last month, a smaller decline than the 75,000 job losses expected, according to a poll of analysts by Bloomberg.

Earlier in the week, the Federal Reserve cut its benchmark interest rate by a quarter percentage point to 2 percent in a move to boost the slowing economy. In a statement after the move, the Fed left open the possibility for both further cuts and a pause in rate cuts.

Ten year treasuries fell 22/32 in price to yield 3.859 percent. Two year notes dropped 5/32 in price to yield 2.457 percent.

Unemployment