The market is expecting the central bank to begin withdrawing some quantitative easing support, but the question is in the timing and degree.

"The taper is on," said Kathy Jones, fixed income strategist at Charles Schwab. "This is the last payroll report the Fed will see before their meeting at the end of July. With the upward revisions to the previous couple of months, it soldifies the idea that they will announce some tapering, probably in September."

A statement from Fed Chairman Ben Bernanke after the June meeting that the bond-buying could wind down completely in 2014 rattled markets.

He qualified the statement by saying it was data-dependent, so the payrolls report likely will feed expectations that the Fed at least will begin to scale back its purchases.

Revisions pushed previous months' reports considerably higher: April's tally rose 50,000 to 199,000, while the May count grew 20,000 to 195,000.



"While we still think October is most likely when the Fed will announce tapering, this report means an increased risk of an earlier taper than we anticipate," said Tom Porcelli, chief U.S. economist at RBC Capital Markets.

Stock got a nice bump at the open, though earlier futures trading indicated that the market would post upwards of a 1 percent gain. Treasury yields jumped to two-year highs and the dollar declined against the euro.