Treasury yields show bond traders have cut their outlook for inflation to the lowest in three years as oil prices fall and before job data this week economists say will add to evidence income growth is weak.

The difference between yields on 10-year notes and similar-maturity Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, dropped to 1.79 percentage points Monday, the least since October 2011. Crude oil has fallen about 30 percent this year.

“Oil is currently the reason why the 10-year yield is going down,” said Kazuaki Oh’e, a debt salesman at CIBC World Markets Japan Inc. in Tokyo. “It puts the inflation fear away from the bond market.”

Average hourly earnings increased 2.1 percent in November from a year earlier, based on a Bloomberg News survey of economists before the Labor Department report Friday. The figure has averaged 2 percent this year, unable to bounce back from the recession that began in December 2007 and ended in June 2009. It was as high as 3.6 percent in 2008.

U.S. employers added 230,000 jobs last month, compared with 214,000 in October, the report is forecast to show.

Stronger Manufacturing

Treasury prices fell Monday after a gauge of manufacturing was higher than economists forecast and as Federal Reserve officials said the decline in oil prices will boost the economy.

The Institute for Supply Management’s factory index was little changed at 58.7 last month, compared with the median forecast in a Bloomberg survey of 58.

Fed Vice Chairman Stanley Fischer and New York Fed President William C. Dudley both said the drop in oil prices will stimulate consumer spending.

Investor expectations for a Fed rate increase in mid-2015 are reasonable and the pace at which the central bank tightens will depend partly on financial-market conditions and the economy’s performance, Dudley said in a speech in New York.