* 10-year yields struggle to find traction at 2 pct * Unemployment rate rises slightly to 7.9 percent * U.S. manufacturing growth quickened in January By Luciana Lopez NEW YORK, Feb 1 (Reuters) - Prices for U.S. Treasuries seesawed in choppy trading Friday after data showed a slight rise in the unemployment rate, but gains were checked by a separate report showing U.S. manufacturing growth picked up in January. Treasuries prices climbed, reversing earlier losses, after data showed a slightly higher unemployment rate in January, suggesting the Federal Reserve might not yet be ready to back off its latest round of quantitative easing. Those gains in Treasuries were reined in by data showing U.S. manufacturing growth quickened last month. The numbers were "quite encouraging for both output and employment prospects ahead," said Andrew Wilkinson, chief economic strategist with Miller Tabak & Co. LLC. Nevertheless, analysts said monetary policy will effectively be on hold at the Federal Reserve until the unemployment rate comes closer to 6.5 percent; Friday's data showed the rate at 7.9 percent in January, up from 7.8 percent in December. While there are elements of the jobs report to please both bulls and bears, said Rob Carnell, an economist with ING Bank, "for now, however, this is further vindication" of the Federal Reserve's expansion of quantitative easing in December and should help limit the testing of 10-year yields seen over recent weeks. Expectations that the Fed will stay on hold longer than expected to help lower unemployment helped push rate futures and Eurodollar futures higher, as investors saw policymakers' ultra loose stance boosting inflation in coming years. Five- and seven-year debt particularly outperformed as investors saw easing pushed out into those sectors. In December, the Fed announced a new bond-buying program that also shifted more of its purchases into intermediate Treasuries, helping push those yields down at year-end. Those yields have rallied since, but touched a one-week low on Friday of 0.8173 percent. The March 2017 Eurodollar contract rose 4 basis points to 98.125, touching its highest since the start of the week, as investors put on bets that the Fed will leave short-term interest rates near zero for years yet. The 10-year Treasury note last traded up 3/32 in price to yield 1.976 percent, despite having yielded above 2 percent earlier in the session. The 10-year notes have been testing the 2 percent level all week, particularly on suggestions that the euro zone debt crisis may be easing. But U.S. economic data has painted a mixed picture, including a surprise economic growth contraction in the fourth quarter, according to figures released this week. Further concerns on growth were kindled Friday as the jobs data suggested "there's still a long way to go before the Fed turns off the monetary taps," said Paul Ashworth, chief U.S. economist with Capital Economics in Toronto. The 30-year bond last traded down 7/32 in price to yield 3.180 percent, from 3.171 percent late on Thursday.