(Updates in New York mid-afternoon time)

By Karen Brettell

NEW YORK, Feb 7 (Reuters) - U.S. Treasury yields rose on

Friday as strong jobs data revisions and a decline in the

unemployment rate were seen as reflecting a solid labor market,

despite headline jobs gains missing economists' expectations.

Employers added 143,000 jobs last month, below economists'

expectations for 170,000 job gains. The unemployment rate was at

4.0%, the lowest since May.

U.S. job growth was likely restrained by wildfires in

California and cold weather across much of the country.

"The top line didn't meet expectations," but other aspects

of the report including jobs revisions and the drop in the

unemployment rate were strong, said Michael Lorizio, head of

U.S. rates trading at Manulife Investment Management.

"This is something that would just further confirm that the

Fed has to be on hold and is still waiting to see how the data

will evolve," he said.

Average hourly earnings rose 0.5% in January for a 4.1%

increase on an annual basis, above expectations for a 3.8%

increase.

"The bottom line is that there is no evidence of major

cracks forming in the labor market. Job openings have declined

and the rate of hiring has slowed, but businesses continue to

favor an approach to addressing slack with solutions that do not

involve layoffs," Thomas Simons, chief U.S. economist at

Jefferies, said in a report.

Other data on Friday showed that U.S. consumer sentiment

dropped unexpectedly in February to a seven-month low and

inflation expectations rocketed as households feared it may be

too late to avoid the negative effects on their purchasing power

from President Donald Trump's threatened tariffs.

Trump said on Friday he plans to announce reciprocal tariffs

on many countries next week.

Fed officials on Friday said the U.S. job market is solid

and noted the lack of clarity over how Trump's policies will

affect economic growth and still-elevated inflation,

underscoring their no-rush approach to interest rate cuts.

The yield on benchmark U.S. 10-year notes was

last up 5.1 basis points on the day at 4.489%. The 2-year note

yield, which typically moves in step with interest

rate expectations for the Federal Reserve, rose 6.7 basis points

to 4.275%,

The yield curve between two-year and 10-year notes

flattened around 2 basis points on the day to

21.1 basis points.

Consumer and producer price inflation for January due next

week will offer the next clues on whether price pressures are

continuing to ease closer to the Fed's 2% annual target.

Money market traders are less than certain that the Fed will

make two 25 basis point cuts this year, with 37 basis points of

rate reductions priced in by December.

The Treasury Department will sell $125 billion in

coupon-bearing debt next week for its quarterly refunding. This

will include $58 billion in three-year notes on Tuesday, $42

billion in 10-year notes on Wednesday and $25 billion in 30-year

bonds on Thursday.

The Treasury on Wednesday said it expects to keep most of

its debt issuance plans unchanged for the next few quarters,

despite some market speculation that new Treasury Secretary

Scott Bessent would moot the possibility of more long-term debt

issuance to fund deficits.