Benchmark 10-year Treasury yields rose to near their highest levels of the year on Thursday after signs of strength in the U.S. job market outweighed an unexpected decline in economic growth in the first quarter.

Gross domestic product fell at a 1.4% annualized rate last quarter, the Commerce Department said in its advance GDP estimate. That was the first decline since the pandemic recession nearly two years ago, and came on the heels of a 6.9% advance in the fourth quarter.

Yet a separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 180,000 for the week ended April 23, suggesting that the U.S. economy is putting the Omicron wave of the coronavirus behind it.

"These levels are lower than the pre-COVID lows and suggest that there has been no relief for employers trying to find help in this tight labor market," said Thomas Simons, an economist at Jefferies. "Workers continue to hold all the leverage."

The yield on 10-year Treasury notes was up 3.1 basis points to 2.849%.

The yield on the 30-year Treasury bond was up 0.8 basis points to 2.917%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 20.8 basis points.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 6.5 basis points at 2.642%.

Yields of 7-year notes rose 6 basis points to 2.904% following an $44 billion auction by the Treasury.