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TREASURIES-U.S. Treasuries fall as U.S. job growth hurts safety bid

NEW YORK, Nov 2 (Reuters) - U.S. Treasuries prices fell on Friday after the government reported stronger than forecast U.S. job growth in October, a hopeful sign for the economic recovery that whetted investors' appetite for riskier assets and damped their desire for safe-haven U.S. government debt. While the bond market's retreat was unmistakable, the fall in prices was far from a rout. Investors noted that the unemployment rate ticked up to 7.9 percent, ensuring that the Federal Reserve's current accommodative monetary stance was securely in place, and that wages remained flat. ``Incomes aren't really growing and if incomes don't grow, how can spending grow?'' said Wilmer Stith, vice president and portfolio manager of the Wilmington Broad Market Bond Fund in Baltimore, Md. ``By no means is the economy out of the woods.'' Immediately after the U.S. Labor Department released the report, investors chose to buy riskier assets over safe-haven U.S. Treasuries. U.S. stocks opened higher while the benchmark U.S. 10-year note fell 10/32 in price. Its yield rose to 1.77 percent from 1.73 percent late on Thursday. The 30-year Treasury bond, down 1/32 before the report, extended that loss to nearly a point, allowing its yield to rise to 2.96 percent from 2.91 percent late on Thursday. The government said employers added 171,000 people to their payrolls last month. The government also said 84,000 more jobs were created in August and September than initially estimated. The jobless rate edged a tenth of a point higher to 7.9 percent, but that was due to a surge of workers back into the workforce. Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said the employment report joined other positive economic data released this week. Though the length of the average workweek was flat at 34.4 hours and average hourly earnings were flat, the data overall signalled ``fairly healthy'' job growth. Some investors speculated about the impact of the more upbeat jobs report on the fiercely fought U.S. presidential election this Tuesday. ``The polls are too close to call, but the latest employment numbers may just save one more job - the President's,'' said Marcus Bullus, trading director at MB Capital Partners.