Treasuries gave back ground after an early rally but still managed to extend the upward move seen over the two previous sessions.
Bond prices moved roughly sideways in afternoon trading, hovering firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.1 basis points to 4.50 percent.
The early surge by treasuries dragged the ten-year yield below the 4.50 percent level for the first time in three weeks.
Treasuries initially rallied following the release of a closely watched Labor Department showing employment in the U.S. increased by much less than expected in the month of April.
The Labor Department said non-farm payroll employment climbed by 175,000 jobs in April after surging by an upwardly revised 315,000 jobs in March.
Economists had expected employment to jump by 243,000 jobs compared to the spike of 303,000 jobs originally reported for the previous month.
The report also showed the unemployment rate crept up to 3.9 percent in April from 3.8 percent in March. The unemployment rate was expected to remain unchanged.
The annual rate of wage growth slowed to 4.0 percent in April from 4.1 percent in March, while economists had expected the pace of wage growth to dip to 4.0 percent.
The data helped generate optimism about the outlook for interest rates following the Federal Reserve's monetary policy meeting earlier in the week.
"Today's payrolls report should be viewed as a net positive, as the labor market shows some signs of cooling, which is a step toward Fed rate cuts," said Larry Tentarelli, Chief Technical Strategist, Blue Chip Daily Trend Report.
He added, "If inflation does not breakout and jobs data stays moderate, a first rate cut could be due in September, but we expect the Fed to remain very dependent on incoming data, meeting by meeting."
Buying interest waned over the course of the morning, however, as traders reacted to the Institute for Supply Management's report on service sector activity in April.
While the report showed an unexpected contraction in service sector activity during the month, it also showed a notable acceleration in the pace of price growth.
Following several key events over the past week, the U.S. economic calendar for next week is relatively quiet, although a preliminary reading on consumer sentiment in May might attract attention later in the week.
Market Analysis