* Unemployment rate rises slightly to 7.9 percent * U.S. manufacturing growth quickened in January * 10-year yields struggle to find traction at 2 pct By Luciana Lopez NEW YORK, Feb 1 (Reuters) - Prices for U.S. Treasuries edged higher in choppy trading Friday after data showed an uptick 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 January ISM was 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 Fed's December QE expansion" and should help limit the testing of 10-year yields seen over recent weeks. The 10-year Treasury note last traded up 7/32 in price to yield 1.960 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 up 3/32 in price to yield 3.164 percent, from 3.171 percent late on Thursday.