U.S. Treasuries yields fell on Friday after employers hired far fewer workers than expected in January, suggesting a loss of momentum in the economy at the same time as the Federal Reserve pares its bond purchase program.
Nonfarm payrolls roles only 113,000 in January, below economists' expectations of 185,000 jobs, and job gains for December were also barely revised up, while the unemployment rate hit a new five-year low of 6.6 percent.
"It's disappointing," said David Coard, head of fixed income sales and trading at Williams Capital Group in New York.
The report is unlikely to sway the Federal Reserve from continuing to make reductions in its bond purchase program, however, with the next Fed meeting not scheduled until March.
"I think you would have to have significant weakness or you would need to see this disappointing trend extend another month or two," said Coard.
The Fed last week said it would reduce its monthly bond purchases by $10 billion to $65 billion and it is expected to continue cutting in $10 billion increments.
Five-year and seven-year notes, the most sensitive to Fed interest rate policy, were among the best performers after the data.
Five-year notes gained 06/32 in price to yield 1.48 percent, down from 1.54 percent before the data. Seven-year notes rose 8/32 in price to yield 2.13 percent, down from 2.19 percent.
Benchmark 10-year Treasuries were last up 9/32 in price to yield 2.67 percent, down from 2.72 percent before the data was released. Thirty-year bonds rose 6/32 in price to yield 3.66 percent, down from 3.68 percent.
The Fed will buy between $500 million and $750 million in notes due 2024 to 2031 on Friday as part of its ongoing purchases.