* GDP drop biggest in five years
* Data raise questions about U.S. growth
* Long bonds post biggest price gains
(Adds comments, late prices and Treasury auction results) NEW YORK, June 25 (Reuters) - U.S. Treasuries prices rose on Wednesday after government data showed the U.S. economy took a much worse bruising in early 2014 than previously calculated. Despite more recent economic reports illustrating solid growth, yields on 30-year Treasuries fell as low as 3.358 percent, a level last touched a week ago. The bonds last traded to yield 3.377 percent, compared to Tuesday's closing 3.403 percent. Thirty-year prices, which were already up on buying by investors rattled by fighting in Iraq, were ahead 17/32. Benchmark 10-year notes were up 8/32 to yield 2.557 percent, versus 2.586 percent late on Tuesday. The yield touched a low of 2.529 percent shortly after the U.S. revision of gross domestic product during January, February and March. "The GDP numbers were worse than expected, and that's in boldface and capital letters," said strategist Lou Brien at DRW Trading in Chicago. America's GDP fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent drop reported last month, according to the U.S. Commerce Department. "This means the Fed the next time it forecasts will have to revise downward its 2014 estimates," Brien said. "It just makes them look silly." Brien said softness in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was especially worrisome. It increased at a 1.0 percent rate but had been previously reported to have advanced at a 3.1 percent pace. Economists estimate severe weather could have slashed as much as 1.5 percentage points from GDP growth in the first quarter. The government, however, gave no details on the impact of the weather. Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan, said the revised GDP numbers were out of line with more recent data for manufacturing, housing, construction, home sales and employment. "Everything else has been coming in quite encouragingly," Price said. "It was an all-in quarter. We often use that term for corporations, when they're going to have a bad quarter and they throw it all in. This time it was economy, and it will likely boost expectations for the second quarter." The government also reported on Wednesday that orders for long-lasting U.S. manufactured goods unexpectedly fell in May, another counter to hopes a strong rebound in growth is under way. Separately, the U.S. Treasury auctioned $35 billion of five-year notes, which came with a high bid of 1.670 percent. That was less than 1 basis point lower than the maturity's when-issued level just before the auction, according to Reuters data.
(Additional Reporting by Herb Lash in New York; Editing by James Dalgleish and Meredith Mazzilli)