* U.S. nonfarm payrolls rose by 192,000 in March
* U.S. unemployment rate unchanged at 6.7 pct
* Medium-term bond yields see biggest dip
(Updates prices, adds analyst comments)
NEW YORK, April 4 (Reuters) - U.S. Treasuries yields dipped Friday after the employment report for March came in slightly below economists' estimates, with medium-term yields falling the most as fears eased of an early hike in interest rates by the Federal Reserve.
Employers added 192,000 new jobs last month, after adding 197,000 jobs in February, the Labor Department said. The unemployment rate was unchanged at 6.7 percent. Economists had expected a gain of 200,000 jobs last month.
"The markets were disappointed," said Dimitri Delis, a fixed-income strategist at BMO Capital Markets in Chicago.
"Fed hikes might take a lot longer than we had originally expected. The data should be a little bit stronger than what we're getting," he said.
Short- and medium-term Treasuries yields had surged after Fed Chair Janet Yellen suggested on March 19 that the central bank could raise interest rates earlier than expected. Yellen was more dovish in a speech on March 31, when she defended the Fed's supportive measures.
Short- and medium-dated Treasuries notes are viewed as most vulnerable to a hike in overnight interest rates, which are currently near zero. The yield on the five-year Treasury note fell roughly 8 basis points Friday to notch its best day since late January.
While the data eased fears of an imminent Fed rate hike, it should allow the central bank to continue scaling back its monthly bond-buying stimulus, traders said. Yellen has argued that the Fed needs to maintain a highly accommodative monetary policy for some time to eliminate slack in the labor market.
The employment report offered further evidence of resilience in the U.S. economy after a brutally cold winter took a toll earlier. The Labor Department revised up the pace of hiring for January and February to show 37,000 more jobs were created than previously reported.
"We're coming out of the winter doldrums, there's no question," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank in New York.
The seven-year U.S. Treasury note rose 17/32 in price to yield 2.3 percent, compared to a yield of 2.38 percent late Thursday. The five-year Treasury note rose 12/32 in price to yield 1.71 percent, compared to a yield of 1.79 percent late Thursday.
The benchmark 10-year U.S. Treasury note rose 16/32 in price to yield 2.73 percent, compared to a yield of 2.79 percent late Thursday. The 30-year Treasury bond rose 20/32 in price to yield 3.59 percent, compared to a yield of 3.63 percent late Thursday.
On Wall Street, all three major stock indexes fell. The Nasdaq Composite tumbled more than 2 percent as momentum stocks sold off for a second straight session, while the Dow Jones industrial average and the Standard & Poor's 500 eased off record levels touched earlier.
Next week, traders will be watching the minutes from the Fed's March policy meeting, to be released on Wednesday, for more clues into the central bank's thinking.
The Fed's transition to a more qualitative assessment of the U.S. economy, in addition to quantitative targets, will be a highlight of the minutes, said Dana Peterson, economist at Citigroup in New York.
The Fed has said it expects not to raise benchmark rates until well after the unemployment rate falls below 6.5 percent, especially if inflation remains below target.
(Editing by Bernadette Baum and Leslie Adler)