The municipal market was slightly firmer Friday. Traders said tax-exempt yields were lower by about two basis points overall.

"We're doing a bit better again," a trader in New York said. "It seems like we're going in strings here. We were firmer for quite a long period of time, then weaker for almost two weeks, and now we're firmer three straight days. That might be what you see in this market for a while, a lot of back and forth, back and forth."

Trades reported by the Municipal Securities Rulemaking Board Friday showed gains. A dealer sold to a customer California 5.05s of 2036 at 6.85%, down two basis points from where they were sold Thursday. Bonds from an interdealer trade of insured Massachusetts 5.5s of 2023 yielded 4.20%, two basis points lower than where they were sold Thursday. Bonds from an interdealer trade of New Jersey Educational Facilities Authority 5s of 2034 yielded 5.18%, down two basis points from where they were sold Thursday. Bonds from an interdealer trade of Empire State Development Corp. 5.25s of 2024 yielded 5.29%, two basis points lower than where they were sold Thursday.

"I think we're a solid two basis points better today," a trader in Los Angeles said. "Maybe three basis points in spots out long, but overall, it's a solid two."

The Treasury market showed gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 2.86%, finished at 2.84%. The yield on the two-year note was quoted near the end of the session at 0.94% after opening at 0.95%. The yield on the 30-year bond, which opened at 3.61%, was quoted near the end of the session at 3.59%.

In economic data released Friday, the advance fourth-quarter gross domestic product fell 3.8% after a 0.5% drop the previous quarter. Economists polled by Thomson Reuters had predicted a 5.4% decline.

The Chicago Purchasing Managers' Business Barometer fell to 33.3 in January from 35.1 in December. Economists polled by Thomson Reuters predicted a 34.0 reading for the indicator.

The fourth-quarter employment cost index rose 0.5% for overall compensation costs to civilian workers. Economists polled by Thomson predicted a 0.7% rise in the index.

Finally, the University of Michigan's final January consumer sentiment index reading was 61.2, compared to the preliminary January 61.9 reading. Economists polled by Thomson Reuters had predicted a 61.9 reading for the index.

Activity in the new-issue market was light Friday.

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