* U.S. jobless claims rise more than expected
* U.S. trade deficit widens on weak exports
* Traders eye Friday's U.S. employment report
By Sam Forgione
NEW YORK, April 3 (Reuters) - Longer-dated U.S. Treasuries yields edged lower on Thursday after data showed U.S. initial jobless claims rose more than expected last week, causing some jitters ahead of the key monthly nonfarm payrolls report due Friday.
The Labor Department said initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 326,000 in the week ended March 29, exceeding economists' expectations of a rise to 317,000.
The data worried investors ahead of the government's closely-watched employment report, which economists expect will show nonfarm payrolls increased by 200,000 jobs in March after rising by 175,000 in February. The unemployment rate is seen falling one-tenth of a percentage point to 6.6 percent.
The higher-than-expected jobless claims were "troubling" for the labor market, but traders were reluctant to make bets ahead of Friday's report, said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
The Commerce Department also said the trade gap increased 7.7 percent to $42.3 billion in February, the largest since September last year, as exports fell to their lowest level in five months. The data also contributed to the slight dip in the long-dated bond yields.
Long-dated Treasuries yields edged lower despite data showing growth in the U.S. services sector accelerated in March. The Institute for Supply Management said its services sector index rose to 53.1 last month, slightly under expectations for a read of 53.5 but comfortably ahead of the February read of 51.6.
"The reaction to the data might be more significant if we didn't have a more important data print tomorrow," said Jake Lowery, portfolio manager for global rates at ING U.S. Investment Management in Atlanta, Georgia.
Traders will be watching Friday's employment data in hopes of a better economic outlook after cold weather hurt economic data at the start of the year.
Traders will also watch for hints on the likely path of the U.S. Federal Reserve's monetary policies. On March 19, Fed Chair Janet Yellen suggested the central bank could raise interest rates earlier than expected.
The 30-year Treasury bond rose 11/32 in price to yield 3.63 percent, compared to a yield of 3.649 percent late on Wednesday. The benchmark 10-year U.S. Treasury note was roughly unchanged to yield 2.79 percent.
On Wall Street, stocks opened modestly higher despite the weak jobless claims data, with both the Dow Jones industrial average and Standard & Poor's 500 at record levels. (Reporting by Sam Forgione; Editing by Paul Simao)