NEW YORK (Reuters) - U.S. bond giant PIMCO has trimmed its expectations for interest rate cuts by the Federal Reserve this year to two after data on Friday showing the U.S. economy created more jobs than expected last month, said a portfolio manager.

"We did have two to three cuts this year and our base case now is most likely two cuts this year," Mike Cudzil, a managing director and generalist portfolio manager at the asset management firm, told Reuters.

U.S. nonfarm payrolls grew by 303,000 jobs in March compared with expectations for an increase of 200,000, data showed on Friday. The figures come on the heels of a series of reports showing U.S. economic activity is proving more resilient to high interest rates than many had predicted.

"Directionally this means a little bit less out of the Fed, and that's a good thing, the economy is proving for now that it can handle higher rates," Cudzil said.

U.S. Treasury yields jumped after Friday's jobs data as the market continued to trim back expectations of rate cuts this year. Expectations for a first 25 basis point rate cut in June stood at 51% on Friday, down from 59% on Thursday, CME Group data showed.

PIMCO has been underweight duration in portfolios over the past few months as it deemed the market was too optimistic on rate cuts this year, Cudzil said. Duration is a measure of a bond portfolio sensitivity to changes in interest rates.

Earlier this year traders expected a total of 150 basis points of cuts in 2024, and that is now down to 67 basis points, which is more in line with the asset manager's expectations on the path of interest rates, Cudzil said.

"I think it makes sense to get closer to neutral and if anything we're looking potentially at when we should get overweight on duration," he said.

Fed officials projected last month three 25 basis point rate cuts this year, even if only by a small margin.

Others in the market on Friday continued to stick to previous calls of three rate cuts this year because they anticipate inflation will moderate despite strong job growth.

"While exceptionally strong, the employment report is consistent with the Fed starting to ease this year in June," analysts at BofA Securities said in a note. "A jump in labor supply can allow for stronger growth without overheating effects," they said.

Rick Rieder, BlackRock's ( BLK ) chief investment officer of global fixed income, said an expansion of the workforce was positive for the economy as long as it kept wages contained.

Still, he said, Friday's jobs report put more emphasis on inflation readings over the next few months to assess the path of interest rates this year.

"Expectations have got to be somewhere between two to three cuts, and I think that today's data moves the needle ever so slightly towards two," he said.