By Ellen Freilich

NEW YORK, Aug 2 (Reuters) - U.S. Treasuries prices climbed

on Friday after weaker-than-expected U.S. job growth in July

added another element of uncertainty as to when the Federal

Reserve would scale back the monetary stimulus it has used to

try to foster economic growth.

Bond traders covered short positions and the 30-year

Treasury bond briefly extended its gain to a full point.

Strategists said supply in the form of a $72 billion

Treasury refunding next week restrained the rally. The Treasury

will sell three-, 10- and 30-year coupons next week.

The benchmark 10-year Treasury note rose 23/32.

Its yield eased to 2.63 percent from 2.71 percent on Thursday.

Traders said short-covering contributed to the move higher.

Weekly Federal Reserve data on dealer positions showed dealers

short by about 14,000 contracts in the six-to-seven-year range

and short about 6,700 contracts in the seven-to-10-year maturity

range as of July 24.

Traders of short-term U.S. interest-rate futures boosted

bets that the Fed will wait until 2015 before raising short-term

borrowing costs. The contracts, tied to the Fed's policy rate

target, rise in price when traders see a bigger chance of a

later Fed rate hike.

The 'modest slowdown' in July job growth 'will keep alive

the debate about the immediate timing of 'tapering,'' said

Decision Economics senior economist Pierre Ellis.

The U.S. Labor Department said U.S. employers slowed their

pace of hiring in July to 162,000. That was below Reuters

consensus estimate of 184,000. But the jobless rate fell anyway,

to 7.4 percent, the lowest in over four years.

The market rallied on the view that the mixed signals could

make the U.S. central bank more cautious about drawing down its

huge economic stimulus program.

But Credit Suisse economist Jay Feldman said the employment

report did not necessarily change the probability of a September

reduction in Fed bond purchases. However, he and others said the

fuzzy signal sent by the payrolls data on that issue put 'a

greater premium' on the next round of numbers.

'The data from here until the September FOMC meeting will be

very important as we are roughly 50/50 whether or not tapering

begins in September, with it very much being a data- dependent

call,' said Eric Stein, co-director of global income at Eaton

Vance Investment Managers in Boston.

LOSING STREAK

Treasuries posted a loss for a third month in a row in July,

falling 0.11 percent, according to a total return index compiled

by Barclays. July's decline was less than the heavy losses

suffered in May and June.

Still, the Barclays Treasuries index fell 2.9 percent during

the three-month span, the most since April-June 2004.

The broader U.S. bond market fared better, earning a 0.14

percent return in July, according to Barclays' Aggregate bond

index. It was still down 2.31 percent so far this year.

(Additional reporting by Ann Saphir in Chicago; Editing by Dan

Grebler)

((ellen.freilich@thomsonreuters.com)(+1-646-223-6309)(Reuters

Messaging:

ellen.freilich.thomsonreuters.com@thomsonreuters.net))

(--------------------- MARKET SNAPSHOT AT 1015 EDT (1415 GMT) -------------------- Sept T-Bond 133-7/32 (+1-6/32) Sept 10-Year note 126-6/32 (+25/32) Change vs Current Nyk yield Three-month bills 0.04 (+0.00) 0.041 Six-month bills 0.075 (+0.01) 0.076 Two-year note 99-28/32 (+01/32) 0.313 Five-year note 99-29/32 (+16/32) 1.390 10-year note 92-16/32 (+23/32) 2.626 30-year bond 86-02/32 (+25/32) 3.708 )

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