* March US job growth much weaker than expected * Benchmark yields on track for biggest drop this year * 10-year and 30-year yields below 200-day moving average By Chris Reese NEW YORK, April 6 (Reuters) - U.S. government debt prices surged on Friday, pushing yields to more than three-week lows after surprisingly weak job growth in March rekindled bets the Federal Reserve would embark on another round of bond purchases to stimulate the economy. The government said U.S. employers added 120,000 jobs last month, which was the smallest increase since October and well below economists' expectations for an increase of 203,000 jobs. "Right now, this is going to keep the Fed in easy-policy mode," said Sean Incremona, an economist at 4Cast Ltd in New York. "They're going to want to see a step toward 300,000 before they start to think about seeing a stronger outlook for the economy." The benchmark 10-year Treasury note jumped 1-8/32 in price to yield of 2.05 percent, down from 2.19 percent late Thursday. Ten-year notes were on track for the biggest single-day drop in yield in more than five months. Earlier in the week, yields climbed when investors were disappointed that minutes from the Fed's March meeting did not give indications of further monetary policy easing, known as QE3. However, Friday's payrolls data changed all that. "This is a real outlier and brings QE3 back into the equation as evidenced by the price action in the Treasuries," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut. Friday's price move pushed yields down to within a range that dominated from November to mid-March. Benchmark yields were trading at the lowest since March 13, when the Fed had its last policy meeting. Prices collapsed after the Fed meeting, when the central bank gave a more optimistic outlook for the economic recovery. The U.S. Treasury market closed early on Friday ahead of the Easter holiday weekend. Thirty-year Treasury bonds last traded 2-15/32 higher in price to yield 3.21 percent, which was the lowest since March 13 and down from 3.34 percent late Thursday. Ten-year note yields and 30-year bond yields fell below their 200-day moving averages, which investors see as signal for more price gains in Treasuries. "The bottom line is that as long as Europe is unsettled, as long as the job market is less than steady, as long as the Fed keeps pumping new stimulus into the market, yields will stay low and investors will stay where the water is calm, in Treasuries," said Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, Tennessee.