NEW YORK, Aug 21 (Reuters) - U.S. Treasury yields

drifted lower on Wednesday as the interest rate outlook

continued to point to the Federal Reserve's easing cycle likely

starting next month, with investors looking to Fed Chair Jerome

Powell's remarks later this week for clues about the size of the

potential rate cuts this year and next.

A report from the Bureau of Labor Statistics on payrolls

revisions for the April 2023-March 2024 period showed a

reduction in jobs by 818,000, or 0.5% lower. This was on the

higher end of market estimates, which had placed those revisions

as high as one million.

The data overall solidified expectations of a rate move in

September.

U.S. 10-, 20-, and 30-year yields slid to two-week lows,

while those on U.S. two-year notes dipped to a one-week trough.

"The labor market appears weaker than originally reported,"

wrote Jeffrey Roach, chief economist, at LPL Financial in a

emailed comments after the data.

"A deteriorating labor market will allow the Fed to

highlight both sides of the dual mandate and investors should

expect the Fed to prepare markets for a cut at the September

meeting. A weaker-than-expected job market could pave the way

for the Fed to cut by a half percentage point in September."

Powell will deliver a speech on Friday at a central bank

gathering in Jackson Hole, Wyoming and investors will parse his

comments for signals on the pace of the looming easing phase.

The rate futures market fully expects the Fed to cut

interest rates next month. However, it has increased the chances

of a 50 basis-point easing in September to 33% from 25% on

Tuesday, according to LSEG calculations. The majority of the

odds still see a 25-bp cut.

Rate futures have also priced in 100 bps in cuts in 2024.

"My general feeling is that the Fed probably wants to make a

50 basis-point cut in September, rather than 25, just because

it's the first rate cut and you want to get the process going,

and then 25 in November and 25 in December," said Tom di Galoma,

managing director and head of fixed income at Curvature

Securities in Park City, Utah.

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

2.6 bps to 3.791%, after earlier falling to a

two-week low of 3.782%.

U.S. 20-year and 30-year yields also dropped to their lowest

in two weeks and were last down at 4.175% and 4.07%

, respectively.

On the front end of the curve, the two-year yield, which

reflects interest rate expectations, fell 5.5 bps to 3.945%

. Earlier, it hit a one-week low of 3.931%.