U.S. government bonds pulled back sharply Friday as the latest employment report pointed to a solid labor market, potentially giving the Federal Reserve more room to raise interest rates.

The U.S. economy added 255,000 new jobs last month, compared with the forecast of 179,000 by economists polled by The Wall Street Journal. Average hourly earnings for private-sector workers rose by eight cents, or 0.3%, from the previous month.

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