TREASURIES-Yields fall after data shows people staying longer out of work

By Tatiana Bautzer

NEW YORK, June 26 (Reuters) - Yields on 2-year Treasury notes eased on Thursday morning after the Labor Department reported a slight fall in weekly jobless claims, but higher recurring claims indicated that more people are staying out of work for longer.

"You are starting to see some cracks in the labor market, and that may give some confidence to markets that the Federal Reserve can begin easing in September", said Stan Shipley, fixed income strategist at Evercore ISI in New York.

First-quarter GDP was also revised lower, although data going through March did not impact the Treasury market. Durable goods orders rose more than expected in May, but the main factor was the surge in commercial aircraft bookings. Outside the transportation industry, orders were muted.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations, were down 3.7 basis points to 3.756%. The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB fell 2.8 basis points to 4.265%. The yield on the 30-year bond US30YT=TWEB fell 1.3 basis points to 4.829%.