* U.S. jobless claims unexpectedly fall to 5-year low * Blue-chip stock gains curb safe-haven demand for bonds * U.S. debt cap extension reduces investor anxiety * Strong $15 bln 10-year TIPS sale pare bond losses By Richard Leong NEW YORK, Jan 24 (Reuters) - U.S. Treasury debt prices slipped on Thursday after data showed first-time filings for weekly jobless benefits fell to a five-year low, raising hopes of an improving U.S. labor market. Higher U.S. blue-chip stock prices, together with a temporary extension of the federal debt ceiling, also undermined safe-haven bets on government debt, as the benchmark S&P 500 index briefly climbed above 1,500 for the first time since late 2007. Thursday's moderate move in the Treasuries market kept benchmark yields within their 13 basis-point trading range of nearly two weeks. Analysts anticipated that range will likely remain intact heading into next week's $99 billion coupon supply and the Federal Reserve's first policy meeting of 2013. The unexpected drop in jobless claims "caught some people by surprise and exposed some longs," said Tom Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA Inc in New York. "The market is in a very tight range and will continue to do so," Roth added. The U.S. Labor Department said on Thursday that initial claims for unemployment benefits fell to 330,000 last week, the lowest level since January 2008. Analysts polled by Reuters had expected claims to rise to 355,000. A surprisingly encouraging report on U.S. manufacturing from data firm Markit helped support the notion the U.S. economy has managed to survive the year-end slowdown linked to fears of the "fiscal cliff" - a series of automatic federal tax hikes and spending cuts worth $600 billion to phase in early this year if a temporary fix were not in place, analysts said. Markit's U.S. manufacturing index suggested the sector expanded at its fastest pace since March 2011. However, the Kansas City Federal Reserve said on Thursday its factory index on its Midwest district was stuck in negative territory in January. The weak reading added to the recent string of disappointing regional business data from the New York, Philadelphia and Richmond Feds. Benchmark 10-year Treasury notes were 5/32 lower in price to yield 1.845 percent, up 1.7 basis points from late on Wednesday. The 30-year bond fell 13/32 to yield 3.043 percent, up 2.1 basis points from late Wednesday. "The market seems to be content without major economic data this week and the debt ceiling debate pushed off," said Mike Lorizio, head of Treasuries trading at Manulife Asset Management in Boston. On Thursday, the government enacted a Republican-backed plan to extend the U.S. Treasury's borrowing authority that will allow it to borrow money through mid-May, temporarily easing default concerns. But after the plan's approval on Wednesday in the House of Representatives, Speaker John Boehner said Republicans would take the next opportunity -- automatic spending cuts set for March 1 -- to demand reforms from President Barack Obama. Even though risk of another possible political standoff in Washington looms, U.S. blue-chip stocks clung to their gains, although technology shares fell, led by a steep 12 percent drop in Apple's share price. STRONG TIPS AUCTION Bond prices bounced off their session lows after strong demand at a $15 billion auction of a new 10-year Treasury Inflation Protected Security issue. The ratio of bids to the amount of new TIPS offered was 2.71, the strongest since the 10-year TIPS sale in May 2012. Indirect bidders, including large money managers and foreign central banks, accounted for 53.3 percent of the purchases, the highest level since November 2010, according to Treasury data. U.S. yields fell early in the session in tandem with those of triple-A rated German Bunds after data showed French business activity shrank in January to the lowest level since March 2009. The Federal Reserve's latest bond purchase, part of its quantitative easing policy aimed to support the economic recovery, also stemmed the losses in Treasuries prices. The U.S. central bank on Thursday bought $3.36 billion of U.S. government debt maturing February 2020 through November 2022. It was set to buy $3.00 billion to $3.75 billion in Treasuries due October 2018 to December 2019.