Lowery began buying Treasuries after yields on the 10-year note reached this year’s high of 2.99 percent in September.

Indicators gauging the health of the economy fell short of analysts’ estimates last week for the first time since July, the Citigroup Economic Surprise Index showed. The minus 2.1 reading on Oct. 30 compares with 53.3 at the start of the month.

U.S. consumer confidence slumped in October, with the Conference Board’s index falling by the most since August 2011. The reading was the lowest in six months and less than the median forecast in a Bloomberg survey.

Holiday Shopping
 

The decline may hold back the household purchases that make up 70 percent of the economy as the U.S. enters the holiday shopping season. Wal-Mart Stores Inc., Macy’s Inc. and Nordstrom Inc. all cut their forecasts on concern demand will falter in the Thanksgiving-to-Christmas season.

Even before the shutdown, the economy showed signs of cooling. Retail sales slowed in September as Americans became less upbeat about their finances and curbed spending.

“The overall backdrop of softer economic data that we’ve been starting to see” has made Treasuries more attractive, Sean Simko, an Oaks, Pennsylvania-based money manager at SEI, which oversees $8 billion, said in an Oct. 29 telephone interview. “We had the sense that the data was going to slow, and with the government shutdown imminent at the time, we thought it would create” a buying opportunity.

He began to buy seven-year and 10-year notes in September.

Demand for government bonds is unlikely to decrease as long as the weakened economy prevents the Fed’s from fulfilling its targets, according to Robert Tipp, the chief investment strategist at Prudential Financial’s fixed-income division, which oversees $395 billion in bonds.

Joblessness is at 7.2 percent -- versus 5 percent when the 18-month recession began in December 2007 -- and above the 6.5 percent rate that the Fed said would prompt policy makers to consider raising short-term rates. Employers added fewer workers to payrolls than economists projected in September, the third straight month the data fell short of forecasts.