NEW YORK, April 4 (Reuters) - U.S. Treasury yields

slipped on Thursday after hitting multi-month highs the previous

session, as labor market data showed some weakness, which

supported expectations that the Federal Reserve could cut

interest rates multiple times this year.

Bond investors also balanced their positions ahead Friday's

nonfarm payrolls report for March, which will be a major factor

in gauging the timing of the first easing in 2024 and the number

of those cuts.

On Wednesday, the five-year, seven-year

, 10-year, 20-year, and

30-year yields hit their highest since late

November.

"There's a little bit of fatigue on the move higher and not

really willing to put on new positions ahead of payrolls

tomorrow," said Zachary Griffiths, senior investment grade

strategist at CreditSights in Charlotte, North Carolina.

"It seems like the path of least resistance ... is toward

higher yields and a policy rate that stays higher for longer,"

Griffiths added.

Thursday's data also contributed to the downdraft in yields.

Initial claims for state unemployment benefits rose 9,000 to

a seasonally adjusted 221,000 for the week ended March 30, data

on Thursday showed. Economists polled by Reuters had forecast

214,000 claims in the latest week.

At the same time, U.S. layoff announcements rose 7% in March

to the highest since January 2023, led by technology and

government-sector job eliminations, outplacement firm

Challenger, Gray & Christmas said.

"We have been expecting labor market weakness to emerge in

response to a pullback among consumers," Tom Simons, U.S.

economist at Jefferies, wrote in a research note.

"Although there is a lot of anecdotal evidence of strain in

the household sector, it is clear that this strain is mostly

rooted in the lower end of the income spectrum, which does not

contribute as much to aggregate consumer spending as the upper

end," Simons added.

In late morning trading, the benchmark 10-year yield was

down 2 basis points (bps) at 4.335%.

U.S. 30-year yields dipped 2.3 bps to 4.485%.

On the shorter end of the curve, the two-year yield was

little changed at 4.682%.

Following Thursday's data, the U.S. rate futures market has

priced in a 63% chance of a rate cut in June, up slightly from

62.3% late on Wednesday and 60.4% a week ago, the CME's FedWatch

tool showed.

The market has also pared back the number of rate cuts to

under three this year, from between three and four a few weeks

ago, according to LSEG's rate probability app.

The yield curve, meanwhile, flattened, or deepened its

inversion from late on Wednesday. The spread between U.S. two-

and 10-year notes was at minus 34.6 bps, compared

with Wednesday's minus 32.7 bps, in what has been described as a

bull flattener.

In a bull flattener, rates on the long end are falling more

sharply than those on the front end, suggesting lower inflation

expectations, analysts said. This often precedes the start of

the Fed's rate-cutting cycle.