TREASURIES-Prices dip as investors eye seven-year note auction
* Treasury to sell $29 billion seven-year notes
* Jobless claims rise but four-week average dips
* Fed meeting, nonfarm payrolls data key next week
NEW YORK, July 25 (Reuters) - Prices for U.S. Treasuries edged lower on Thursday ahead of a sale of seven-year notes, with new economic data doing little to answer looming questions about upcoming policy decisions by the Federal Reserve. U.S. jobless claims rose slightly last week but a four-week average dipped. Analysts underscored seasonal factors affecting the number, which Fed policymakers might consider when they meet next week to consider slowing their monthly $85 billion purchases of Treasuries and mortgage-backed securities. Those seasonal factors also make it tricky to use the jobless data as a bellwether for key nonfarm payrolls data due next week. "We tend to discount the July claims numbers as a predictor for payrolls because of the volatility," cautioned Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York. Instead, investors on Thursday were positioning themselves for the third and final sale of new intermediate-dated debt this week, when the Treasury is slated to sell $29 billion of seven-year notes. "We're probably going to trade in a range until getting close to the auction, when maybe some more concession comes in," said Thomas Simons, money market economist at Jefferies & Co in New York. The benchmark 10-year note fell 7/32 in price on Thursday to yield 2.609 percent, from 2.584 percent late on Wednesday. The 30-year bond fell 7/32 in price to yield 3.659 percent, from 3.645 percent late on Wednesday. The Treasury previously sold $35 billion in two-year notes on Tuesday and $35 billion in five-year notes on Wednesday. Markets are now pondering when the U.S. Federal Reserve might slow or stop its asset purchase program, aimed at boosting employment. Two events next week could prove key in figuring out when that tapering might start: a Fed policy meeting on Tuesday and Wednesday and labor market data on Friday. Investors will scour the Fed statement on Wednesday, the final day of a policy meeting, for clues about how policymakers view the health of the world's biggest economy. The nonfarm payrolls data on Friday could also give clues about the strength or weakness of the U.S. economy. Fed chairman Ben Bernanke has emphasized the health of the labor market as a major factor in any Fed pullback decisions. Policymakers want to see the unemployment rate closer to 6.5 percent from its current 7.6 percent.