The 2-year note yield TMUBMUSD02Y, 0.148% fell 1.2 basis point to 0.143%, adding to a weekly drop of 1.9 basis points. The 30-year bond yield TMUBMUSD30Y, 2.316% edged up 3.9 basis points to 2.275%, trimming its weekly drop to 2.7 basis points.

What’s driving Treasurys?

The U.S. Labor Department’s nonfarm employment report showed 266,000 new jobs were created in April, falling short of the 1 million new job gains predicted by MarketWatch-polled analysts.

Yields initially fell as the report raised questions about the assumption that a rapidly recovering labor market, especially in the services sector, would nudge the Federal Reserve toward the process of lifting off from its easy-money policies.

Minneapolis Federal Reserve President Neel Kashkari said on Friday that the jobs report showed how far the economy had to go before reaching full employment.

But some analysts cautioned against taking the report at face value, noting that stripping out seasonal adjustments would see a more impressive 1.1 million gains on an unadjusted basis.

Indeed, long-term Treasurys returned to back where they traded at the start of the day, suggesting bond traders may have seen April’s report as a blip in an impressive economic recovery.

What did market participants say?

“The jobs report vindicates what the Fed has been saying all along – that the recovery will take a lot longer than expected” said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview.

“Equities are viewing this number as probably putting the Fed even further on hold, and leading more stimulus to be pumped into the economy,” Tony Bedikian, head of global markets at Citizens Bank, told MarketWatch. “But it looks like the bond market isn’t terribly concerned by the number.”