TREASURIES-Bonds jump as weak job data fan recovery worry

* Bonds jump for a 2nd day as job decline accelerates anew

* Sept payrolls fall 263,000, jobless rate up to 9.8 pct

* Fed's Rosengren warns of premature exit from support (Updates market action, adds quote, byline)

By Richard Leong

NEW YORK, Oct 2 (Reuters) - U.S. Treasuries prices rallied on Friday for a second straight day after government data showed a bigger-than-expected drop in payrolls in September, rekindling worries over the vigor of an economic recovery.

Analysts have cautioned that persistent weakness in the labor market will constrain consumer spending, which accounts for about 70 percent of the U.S. economy.

Sluggish spending would slow recovery from a long recession and forestall the Federal Reserve -- the U.S. central bank -- from tightening its currently ultra-loose monetary policy.

"It shows expectations for recovery may have gotten a little ahead of the reality," said Gary Thayer, macrostrategist at Wells Fargo Advisors in St. Louis, Missouri, of the jobs data. "We're probably still on track for recovery, but it's going to take time to unfold."

U.S. employers shed 263,000 jobs in September, far more than the 180,000 cut forecast by analysts polled by Reuters, according to the U.S. Labor Department.

The jobless rate, as expected, rose to a 26-year high of 9.8 percent last month. For more see [ID:nN02314318].

Earlier, Boston Fed President Eric Rosengren told the Greater Boston Chamber Financial Services Forum the Fed should resist the temptation to tighten monetary policy too soon as the U.S. economy remains vulnerable. [ID:nNYS005461]

The price of benchmark 10-year Treasury notes US10YT=RR last traded up 17/32 at 104-8/32 after hitting a session high of 104-12/32 shortly after the Sept jobs data. Its yield, which moves inversely to price, was 3.12 percent, the lowest in about 4-1/2 months. This compared with 3.18 percent late on Thursday. (Additional reporting by Ellen Freilich; Editing by James Dalgleish)