US Treasury yields spiked up on Friday after a Labor Department report showed a much lower than expected May unemployment rate.

The benchmark 10-year yield was up 10.5 basis points at 0.9252pc, its first time above 0.9pc since March 20 and continuing a steady march higher in recent days as investors sold government bonds and took on riskier assets.

A key part of the US Treasury yield curve also rose dramatically.

The Labor Department's monthly employment report showed the jobless rate dropped to 13.3pc last month from 14.7pc in April.

Economists polled by Reuters had forecast the jobless rate jumping to 19.8pc in May.

The figures reflected an improvement in the jobs market as businesses reopened after closing due to the ongoing COVID-19 pandemic.

"The sell-off in the bond market in the last few weeks seems to be justified," said Subadra Rajappa, head of US rates strategy for Societe Generale in New York.

The report, she said, "probably points to a faster recovery, at least in the jobs market, than people had expected."

Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis, said, "It's not like we're back to normal but that's a big turn."

The part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 70 basis points, about 15 basis points higher than Thursday's close and its highest since February 2018.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 2.8 basis points at 0.222pc in morning trading.