U.S. bond yields rose on Friday and the curve steepened after data showed wage increase pressures eased even with the labor market on a strong footing.

U.S. job growth exceeded expectations in April, underscoring the economy's strong fundamentals despite a contraction in gross domestic product in the first quarter.

Importantly, average hourly earnings increased 0.3% after advancing 0.5% in March, bringing the year-on-year increase in wages to 5.5% from 5.6% in March.

“The broad-based increase in payrolls is encouraging," said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin.

"Wages are rising less than inflation, so despite massively high job openings there’s no sign of a wage-price spiral."

The Fed is trying to slow inflation by tightening monetary policy, which has the risk of dragging the economy to a recession. Market volatility has increased as traders navigate that thin line.

The yield on 10-year Treasury notes was up 5.3 basis points to 3.121%.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 0.1 basis points at 2.725%. The 2-year/10-year yield spread was at 39.4 basis points.

The yield on the 30-year Treasury bond was up 5.4 basis points to 3.215%.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 3.203%, after closing at 3.23% on Thursday.

The 10-year TIPS breakeven rate was last at 2.839%.

The U.S. dollar 5 years forward inflation-linked swap , seen by some as a better gauge of inflation expectations due to possible distortions caused by the Fed's quantitative easing, was last at 2.622%.