NEW YORK (Bloomberg) — Yields on benchmark 10-year Treasury notes increased the most in more than a year after reports showed better-than-expected gains in employment, manufacturing and service industries.Government statistics next week are expected to show a rebound in consumer confidence and that weekly claims for jobless benefits remain at a level indicating strength in the labor market. Interest-rate futures show traders pared bets the Federal Reserve will cut interest rates this year.

"Given the economic picture we have, with pretty consistent, steady growth, yields should be a bit higher," said Jason Brady, a managing director at Thornburg Investment Management Inc. in Santa Fe, New Mexico, which oversees $4 billion in debt. "The Fed is happy where they are."

The yield on the benchmark 4 [1/2] percent note maturing in May 2017 climbed 17 basis points, or 0.17 percentage point, to 5.18 percent this week, according to bond broker Cantor Fitzgerald LP. The price of the security fell 1 7/32, or $12.19 per $1,000 face amount, to 94 24/32.

The yield increase is the biggest since an 18 basis-point gain in the week ended March 31, 2006, when investors pushed up yields on concern the central bank would raise rates more than most analysts were forecasting.