Bond prices were up and down Thursday after the government's June payroll report came in largely as expected, allaying some fears about the health of the economy, but a survey showing weakness in the service sector tempered gains.

The benchmark 10-year note fell 2/32 to 99 7/32 to yield 3.97%, unchanged from late Wednesday. Bond prices and yields move in opposite directions.

The 30-year long bond fell 12/32 to 97 16/32. Its yield rose to 4.52% from 4.50% the previous session. The 2-year note gained 4/32 to 100 21/32, while its yield declined to 2.52% from 2.58% late Wednesday.

The bond market closed at 1 p.m. ET Thursday and will remain closed Friday in observance of the July 4th holiday.

Jobs: The Labor Department reported a net loss of 62,000 jobs in June. That matched the job loss figure for May, which was revised higher from 49,000. Economists surveyed by Briefing.com had forecast a loss of 60,000 jobs.

While the report highlighted the ongoing trend toward weakness in the labor market, many market participants had anticipated a much higher number of job losses.

The report also showed that the nation's unemployment rate held steady at 5.5%. Economists had forecast the rate would come in at 5.4% in the latest reading.

In news, the Labor Department said initial claims for unemployment insurance rose 16,000 to 404,000 in the latest week.

Investors often flock to the security of government-backed bonds when the economic climate is uncertain. Conversely, demand for bonds usually falls when the economy shows signs of improvement and investors are encouraged to seek out greater returns in the stock market.

Service sector: The jobs data was followed by a report from the Institute for Supply Management (ISM) that showed business activity in the service sector declined in June.

The ISM's non-manufacturing index fell to a reading of 48.2 from 51.7 in May. Economists were expecting a reading of 51, according to economists polled by Briefing.com.

A reading above 50 indicates growth in the sector, and a reading below 50 represents a sector-wide decline.