If you'd paid for admission to this

employment report

Friday in the Treasury market, you'd want your money back. The report itself was confusing, the market's reaction to it was indecisive, and at the end of the day prices were very little changed.

The bottom line: Before the May jobs report's 8:30 a.m. EDT release, most people believed that an interest rate hike at the

Fed's

June 29-30 meeting was a foregone conclusion. At the end of today, nothing's changed. The only question remains whether a June 30 rate hike is likely to be followed by additional hikes by the end of the year.

The benchmark 30-year Treasury bond ended the day down 4/32 at 90 2/32, lifting its yield a basis point to 5.97%. Shorter-maturity note yields likewise rose by about a basis point. Consolation prize for those who were hoping for more fireworks: some yields are at new highs for the year. The long bond's last close at 5.97% was on May 15, 1998.

The employment report's headline number certainly looked like a thriller -- just 11,000 new jobs in May, vs. an average forecast of 216,000 among economists polled by

Reuters

, and the initial reaction to it was euphoric, as the long bond immediately soared 18/32. But the full report's neutral tone became apparent pretty quickly, as analysts spotted the big revision to the April numbers (the April payrolls gain was revised up to 343,000 from 234,000). In addition, the

unemployment rate

ticked back down to its 29-year low of 4.2%.

Average hourly earnings

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rose 0.4%, a tenth more than expected, lifting the year-on-year rate for the first time in four months. And while the

average workweek

lengthened by only a tenth of an hour to 34.5 hours, manufacturing overtime lengthened to 4.6 hours from 4.3, possibly foreshadowing a rebound in manufacturing payrolls, which contracted for the 13th time in the last 14 months.

In the combination of numbers, traders read the message that nothing in the report challenges the Fed's view, expressed in the

statement it released when it adopted a policy bias in favor of raising the fed funds rate, that "already tight domestic labor markets and ongoing strength in demand in excess of productivity gains" give cause to be "concerned about the potential for a buildup of inflationary imbalances that could undermine the favorable performance of the economy."

"I think the Fed has been clear about what it intends to do and the market's priced for that," said David Connors, managing director at

Credit Suisse First Boston

. Prior to today's release, a 25-basis-point hike in the fed funds rate to 5% at the end of the month seemed inevitable, and a return to 5.25% in August looked very likely.

"Nothing in today's report changes that," Connors said. "There wasn't any pressure in the market to reprice in any way." And there probably won't be before the end of the month, he says. "We've sold off pretty hard so there's a chance for some correction, but nothing sustained," he said. "I wouldn't be surprised to see yields stay within 20 basis points in either direction, and chances are in the near term it'll be far narrower than that."

Avram Altaras, managing director at

Bear Stearns

, is more optimistic, hoping for a statement out of the Fed at the end of the month suggesting that the rate hike it will presumably deliver at that point is probably the only one that'll happen this year. In that case, he said, "these yield levels are roughly as bad as it gets."

"The market is discounting two rate hikes, so if they say there's only going to be one and no more, then there's value in the market," he said.

But Altaras shares the view that in the meantime a sustained rally is a pipe dream. "Any rally will be met by selling," he predicted.