Yields, which fall when bond prices rise, initially slid after the Labor Department said the economy added 266,000 jobs in April, well short of the one million new jobs that economists had anticipated and down from 770,000 jobs added in March.

The “report was pretty uniformly disappointing,” said

Ian Lyngen,

head of U.S. rates strategy at BMO Capital Markets. Still, it was “not all that surprising given the fact that economic data in the middle of a pandemic is always difficult to estimate,” he said.

After starting the year below 1%, the 10-year Treasury yield climbed to around 1.75% in March, as investors bet that vaccine and government-spending fueled economic rebound would spur inflation above the Federal Reserve’s 2% annual target. Yields have since subsided as investors take a more wait-and-see approach to the recovery.

The bond market’s reaction to the jobs report suggested investors weren’t too worried about the economic outlook but were continuing to re-evaluate how soon the Fed will be able to raise short-term interest rates.

While the 10-year yield ticked higher, yields on shorter-term Treasurys ended lower on the day. The yield on the five-year note settled at 0.770%, down from 0.796% Thursday and its recent peak of 0.973% set in early April. The yield has declined for six straight sessions, a sign investors think the Fed could be slower to tighten monetary policy than they previously expected.

Over the short-term, a more accommodative Fed might reflect a slightly weaker economy than investors were hoping for. Still, that policy approach could boost the economy over a more extended period, making longer-term Treasurys like the 10-year note or 30-year bond less attractive to investors. The 30-year bond yield settled Friday at 2.275%, up from 2.236% Thursday.

Friday’s data was just the latest this week to come below analysts’ expectations.

On Monday, the Institute for Supply Management’s index of manufacturing activity came in at 60.7 in April—down from 64.7 in March and below expectations for a 65.0 reading. On Wednesday, the ISM said its index of activity in the services sector fell to 62.7 in April from a record high of 63.7 in March. Economists polled by The Wall Street Journal had expected a reading of 64.1.

In both cases, the readings were still well above 50, indicating an expansion of economic activity.

Write to Sam Goldfarb at sam.goldfarb@wsj.com