TREASURIES-Prices fall after jobless claims data; eyes on TIPS auction

* Jobless claims better than expected

* Philadelphia manufacturing data expected

* Treasury to sell $18 bln, five-year TIPS

* Bond market to close early Thursday, closed on Friday

NEW YORK, April 17 (Reuters) - U.S. Treasuries prices fell on Thursday after unexpectedly fewer Americans filed new claims for unemployment, and ahead of the Treasury's scheduled sale of $18 billion in new inflation-linked debt. Initial claims for state unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000 for the week ended April 12, the Labor Department said on Thursday. They stayed close to a 6-1/2 year low touched the prior week. Selling came after intermediate-dated debt weakened on Wednesday after Federal Reserve Chair Janet Yellen took an optimistic tone on the economy, but stressed any decision to raise interest rates would hinge on healing in the labor market and how briskly inflation rose toward the Fed's 2 percent goal. "There is follow-through from yesterday, there was significant selling in the middle of the curve," said Tom Tucci, head of Treasuries trading at CIBC in New York. Low liquidity before the early close is likely adding to the price pressure, he added. The bond market will close at 2 p.m. EDT (1800 GMT) on Thursday and be closed all day on Friday for the Good Friday holiday. Benchmark 10-year notes were last down 7/32 in price to yield 2.66 percent, up from 2.64 percent late on Wednesday. The yields have risen from one-and-a-half-month lows of 2.60 percent on Tuesday, when concerns about escalating tension in Ukraine sparked safety buying and a weak New York manufacturing survey raised fears over the strength of the U.S. recovery. A Philadelphia manufacturing survey due later on Thursday will be scrutinized for further signs of weak activity. The Treasury is also due to sell $18 billion in five-year Treasury inflation-protected securities, or TIPS, on Thursday, testing demand for inflation-linked bonds as inflation continues to run well below the Fed's 2 percent target. Yellen said on Wednesday that persistently low inflation poses a more immediate threat to the U.S. economy than rising prices, stressing that the U.S. central bank would be delivering policy stimulus for some time to come. Data on Tuesday showed that U.S. consumer prices firmed a bit in March, as food and housing rental costs rose in a possible sign that a disinflationary trend had run its course.

(Editing by Paul Simao)