NEW YORK, Dec 2 (Reuters) - U.S. Treasury yields dropped on Monday morning after the Commerce Department reported that construction spending unexpectedly fell in October as investment in private projects tumbled to its lowest level in three years.
The data sounds a cautionary note on the U.S. economy despite a recent string of upbeat reports. Construction spending dropped 0.8% in October versus an increase of 0.4% predicted by economists polled by Reuters.
Despite falling on the data, yields remained higher on the day. Yields on notes with shorter maturities fell the most, with the two-year yield up 2 basis points to 1.622%. The benchmark 10-year yield was last at 1.833%, up 5.7 basis points on the day, steepening the yield curve. (Reporting by Kate Duguid Editing by Chizu Nomiyama)