NEW YORK (CNNMoney.com) -- Bonds retreated Thursday after a weekly report on jobless claims came in lower than expected, suggesting continued strength in the labor market.

The dollar was mixed against the euro and the yen.

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The 10-year Treasury note fell 12/32, or $3.70 on a $1,000 note, to yield 4.60 percent, up from 4.55 percent late Wednesday.

The 30-year bond slipped 19/32, or $5.90 on a $1,000 bond, to yield 4.76 percent, up from 4.71 percent the previous session. Bond prices and yields move in opposite directions.

The five-year note fell 7/32, yielding 4.54 percent, while the two-year was down three ticks at 4.65 percent.

The U.S. Labor Department reported that jobless claims fell to 302,000 in the week of Sept. 30 from 319,000 the week before.

The number, which was expected to come in at 315,000, suggests that the labor market is still healthy.

Treasurys faced further downward pressure from healthy September sales being reported by major retailers.

Thursday's economic readings come one day after Federal Reserve Chairman Ben Bernanke delivered a speech at the Economic Club of Washington where he said that the economy is experiencing a "substantial correction" in the housing market and that the Fed is closely watching how it plays out.

Bernanke predicted the housing slowdown would take one percentage point off growth in the gross domestic product this year and possibly next. GDP is the broadest measure of the nation's economy.

There has been a growing consensus in recent weeks that a weakening economy will stop the central bank from raising interest rates any higher.

But if Fed officials take a more hawkish tone about inflation, it could raise fears about future hikes. Kansas City Fed President Thomas Hoenig said Tuesday that inflation was "too high.''

But market observers are focused on Friday, when probably the most significant economic reading of the week - the September jobs report - is due.

In currency trading, the euro bought $1.268, down from $1.2713 late Wednesday. The dollar bought ¥117.63, down slightly from ¥117.88 in the previous session.

--from staff and wire reports

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