The 10-year Treasury yield increases due to a surprising drop in the unemployment rate.

The unemployment rate unexpectedly fell in November, causing treasury yields to jump on Friday, indicating that the labor market remains tight despite the Federal Reserve's efforts to cool the economy.

The yield on the increased by 10 basis points to 4.233% after recovering some losses earlier in the week when it dropped to 4.14%. This is similar to the levels seen in early September.

The was last more than 14 basis points at 4.725%.

An inverted relationship exists between yields and prices, with one basis point equal to 0.01%.

The U.S. labor market displayed continued resilience in November, as nonfarm payrolls increased by 199,000, surpassing the 190,000 jobs predicted by economists and outpacing the October gain of 150,000.

The unemployment rate unexpectedly decreased to 3.7% instead of the predicted 3.9%.

According to Stephanie Link, chief investment strategist at Hightower Advisors, the data for today and the entire week supports a "soft landing." She is confident in this conclusion.

Economic data has been closely watched by many investors, who hope it will indicate a slowdown of the economy, potentially ending the Fed's rate-hiking cycle and providing more clarity on when rates may be cut.

Last week, Jerome Powell, the Fed Chairman, stated that discussing rate cuts was premature and the central bank may tighten monetary policy if required. The Fed is scheduled to meet next week and is predicted to maintain interest rates.

The number of jobs added in November, according to ADP's private payrolls report, was lower than the estimated 128,000, while weekly initial jobless claims came in lower than expected.

— CNBC’s Jeff Cox contributed to this report.