(Adds Cohn comments, updates prices)
* U.S. employers add 209,000 jobs in July
* Economic advisor Cohn indicates corporate tax cuts
* Treasury to sell $62 bln coupon-bearing supply next week
NEW YORK, Aug 4 (Reuters) - U.S. Treasury yields rose on Friday after data showed that U.S. employers hired more workers than expected in July, while wage growth also met economists expectations. The Labor Department said nonfarm payrolls increased by 209,000 jobs last month amid broad gains. June's employment gain was revised up to 231,000 from a previously reported 222,000. Average hourly earnings increased 9 cents, or 0.3 percent, in July after rising 0.2 percent in June. That was the biggest increase in five months. Wages rose 2.5 percent in the 12 months to July, matching June's gain. It was strong across the board, said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York. It puts (the Fed) still on track to start the program to wind down the book in September." Many analysts and investors expect the U.S. Federal Reserve to announce plans to reduce the size of its $4.5 trillion balance sheet at its September meeting. Further interest rate hikes are seen as unlikely before the Fed's December meeting. Futures traders are pricing in a 45.5 percent chance of a rate hike in the month, according to the CME Group's FedWatch Tool. The next clue on Fed policy is likely to come at the U.S. central bank's economic symposium in Jackson Hole on Aug. 24-26.
Benchmark 10-year notes fell 10/32 in price to
yield 2.26 percent, up from 2.23 percent late on Thursday. Bonds added to price losses after White House economic advisor Gary Cohn suggested that the U.S. may cut its corporate tax rate by at least a third in an interview with Bloomberg TV.
That renewed hopes that the government will introduce stimulus to help boost the economy. The yield curve between five-year notes and 30-year bonds steepened to 102 basis points, after briefly flattening below 100 basis points after the employment report, the lowest level since July 11. The Treasury Department next week will sell $62 billion in new coupon-bearing supply, including $24 billion in three-year notes, $23 billion in 10-year notes and $15 billion in 30-year bonds.
(Editing by Bernadette Baum)