While the durable goods and housing figures were not seen as bad enough to prompt a shift in market expectations for gradual interest rate hikes this year, the picture they painted was hardly of a gangbuster economic expansion.
Such lingering economic doubts helped lift longer maturities, with the benchmark 10-year note up 2/32 in price for a yield of 4.27 percent, down from 4.28 percent on Tuesday and smack in the middle of its recent trading range.
"The economy is generally slowing for a wide variety of reasons - energy is one - but also the stimulus is wearing off," said Alan Ruskin, research director at 4Cast Ltd.
"There's a lot of wishful thinking out there. I think the Fed is trying to talk up the economy to justify the tightening they want to do," he added.
Fed officials this week have touted the country's economic prospects and argued that the recent spike in oil prices would not derail the recovery.
Fed Bank of Atlanta President Jack Guynn on Wednesday repeated the mantra, noting the Fed would be flexible when considering the impact of high energy prices on the economy, but adding that he felt solid growth would soon resume. Yet the day's economic reports suggested otherwise. New home sales slumped 6.4 percent in July indicating the red-hot housing sector - a major engine of growth - is beginning to cool under the weight of higher interest rates.
US orders for durable goods rose 1.7 percent in July when median forecasts had called for a 1.0 percent gain, but most of the rise was accounted for by a doubling of aircraft orders. Excluding the transportation sector, orders were up just 0.1 percent, well below what some analysts had expected.
Primary dealers were left with $12.52 billion of the sale, paper they will likely be keen to unload ahead of next week's all-important August payrolls report. That prospect pushed the current two-year note 1/32 lower for a yield of 2.47 percent from 2.46 percent.
The five-year note was down 1/32 for a yield of 3.46 percent, while the 30-year bond added 4/32, lowering yields to 5.05 percent from 5.07 percent.