* U.S. nonfarm payrolls rise 288,000, Treasuries sell off
* Analysts take issue with decline in labor force
* U.S. two-year note yields hit one-month peaks
By Gertrude Chavez-Dreyfuss
NEW YORK, May 2 U.S. Treasury yields rose on Friday after data showed that job growth in the world's biggest economy had picked up at its quickest pace in more than two years in April, suggesting a healthy recovery in the U.S. labor market.
Yields on benchmark 10-year notes and 30-year bonds jumped to session highs after the U.S. employment report, while that on two-year notes climbed to one-month peaks.
Data showed that U.S. non-farm payrolls surged 288,000 in April, the most since January 2012, while the jobless rate dropped to a 5-1/2 year low of 6.3 percent. The headline jobs figure handily beat Wall Street's expectations for an increase of just 210,000.
Still, some economists took issue with the unemployment rate, which included a decline in the labor force by 806,000, the fourth-largest since data recording started in 1948.
"The market perceives the unemployment numbers as good on quantity, but bad on quality," said Guy Lebas, chief fixed income strategist, at Janney Montgomery Scott in Philadelphia.
"The five-year ... is a better response to the unemployment rate rather than the 10- or 30-year because that's going to embody the timing of the Fed rate hikes a little bit more effectively," he said.
Lebas said the five-year sold off, but yields were not far from lows.
In morning trading, the five-year note was down 11/32, yielding 1.72 percent, from 1.66 percent late Thursday. The yield hit the day's high of 1.76 percent after the payrolls data was released, while the low was 1.65 percent.
The 5-year note has led a sell-off over the past few sessions.
The benchmark 10-year U.S. Treasury note fell 15/32 in price to yield 2.66 percent, compared with 2.62 percent late on Thursday. Yields hit session highs of 2.70 percent following the jobs number.
Prices of 30-year Treasury bonds were down 19/32 to yield 3.43 percent, from 3.41 percent the previous session. (Editing by Bernadette Baum)