* U.S. private sector report shows increased hiring for April
* U.S. first-quarter GDP growth much weaker than expected
* Fed cuts bond purchases, as expected.
* U.S. 30-year yields drop for fourth straight month (Updates prices, adds quote, Fed statement details)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 30 (Reuters) - U.S. Treasury yields slumped on Wednesday after data showed growth in the world's largest economy was much weaker than expected in the first quarter, offsetting a report that showed U.S. private sector employment increased this month.
Month-end buying has also underpinned government bond prices, which move inversely to yields, including a reduction in the supply of two- and three-year notes announced earlier on Wednesday, analysts said.
The U.S. bond market posted its fourth straight month of gains in April led by bids for long-dated debt due to worries about Ukraine. The Barclays' Aggregate index, a gauge of U.S. investment-grade bonds, rose 0.60 percent in April, bringing year-to-date gains to 2.45 percent.
Not surprisingly, U.S. 30-year yields declined for a fourth consecutive month in April, while those of benchmark 10-year notes fell for a second.
On Wednesday, long yields dropped following the U.S. gross domestic product data, but briefly inched higher after the Federal Reserve announced a further cut in its bond-buying program. The statement affirmed the Fed's confidence in the U.S. economy's recovery despite soft growth figures.
In a unanimous decision, the Fed in a statement said it would reduce its monthly bond purchases to $45 billion from $55 billion, as expected, keeping it on track to end the program as early as October.
"As bad as the first quarter GDP was, it wasn't going to stop them from tapering," said Scott Brown, chief economist, at Raymond James in St. Petersburg, Florida.
"We expect to have a pick-up the rest of the year. If things evolve as they forecast, it looks like the middle of next year we are going to see rates start going up."
In afternoon trading, the benchmark 10-year U.S. Treasury note was up 11/32 in price to yield 2.65 percent, compared with 2.69 percent late Tuesday.
U.S. 10-year yields slid after data showed GDP for the first three months of the year expanded at just a 0.1 percent annual rate, the slowest since the fourth quarter of 2012. The market was expecting a rise of 1.2 percent.
Prior to the GDP data, a separate report by payroll processor ADP showed U.S. private employers added 220,000 workers in April, the highest since November, pushing Treasury yields to the day's highs.
The strong ADP report boded well for Friday's U.S. nonfarm payrolls data. A Reuters poll showed economists expect the U.S. economy to have created 210,000 jobs in March. The U.S. nonfarm payrolls report is due out on Friday.
Prices of 30-year Treasury bonds rose 15/32 to yield 3.46 percent, from 3.48 percent late Tuesday. U.S. 30-year yields hit the day's trough of 3.45 percent.
Further supporting Treasury prices was a move by the U.S. Treasury to cut coupon auctions in the coming weeks and months because of a narrower federal budget deficit. The United States will reduce auction sizes for two- and three-year notes by $1 billion in each month the next three months.
The two-year note yield fell to 0.41 percent on Wednesday from 0.45 percent the previous session. (Additional reporting by Richard Leong; Editing by James Dalgleish)