New York : Treasuries declined, extending their weekly drop, after the US government's payrolls report showed the world's largest economy added more jobs in September than economists forecast.

Yields on 30-year bonds rose for a fourth consecutive day on eased concern America may be slipping into another recession and on speculation Europe will adopt a coordinated approach to supporting banks crippled by the sovereign-debt crisis.

"Risk becomes the preference of the day," Christopher Sullivan, who oversees $1.6 billion (Dh5.87 billion) as chief investment officer at United Nations Federal Credit Union in New York, said before the report. "We've had a tremendous move, particularly on longer-term securities."

Yields on 30-year bonds increased ten basis points, or 0.10 percentage point, to 3.05 per cent at 8:32am in New York, according to Bloomberg Bond Trader prices. The 3.75 per cent securities maturing in August 2041 dropped 2 6/32, or $21.88 per $1,000 face amount, to 113 18/32. Yields slid three days ago to 2.69 per cent, the lowest level since January 2009.

Payrolls increase

Payrolls climbed by 103,000 workers after a revised 57,000 increase in the prior month that was more than originally estimated, US Labour Department data showed in Washington. The median forecast in a Bloomberg News survey called for a rise of 60,000. The gain reflected the return to work of 45,000 telecom employees. The jobless rate held at 9.1 per cent.

Thirty-year bond yields dropped 20 basis points when the government released its jobs figures on September 2. Yields increased 18 basis points on August 5, when the payrolls report showed the job market had gained traction. Standard & Poor's cut the US credit rating for the first time after financial markets closed that day.

Government securities surged last quarter, when traders speculated that Greece was headed for default and the Federal Reserve announced its plan to replace shorter-term Treasuries in its portfolio with longer maturities.

The Fed said on September 21 that it would buy $400 billion of US debt with maturities of six to 30 years through June while selling an equal amount of securities due in three years or less to support the economy by keeping borrowing costs low.

Yields on 30-year bonds decreased 146 basis points in the third quarter, the most since falling 164 basis points in the last three months of December 2008. Ten-year note yields fell 125 basis points.

Bonds slid Thursday as the European Central Bank said it will reintroduce yearlong loans, giving banks access to unlimited cash through January 2013, and resume purchases of covered bonds to encourage lending.

The European Commission is pushing for a coordinated capital injection into banks.