(Updates with market activity, analyst comment) By Ross Kerber Feb 5 (Reuters) - Traders drove U.S. Treasury yields to record levels at both ends of the yield curve on Friday in a choppy session after a report showed employment growth rebounded less than forecast in January, strengthening expectations of more stimulus spending in Washington. The benchmark 10-year yield was last up 1.6 basis points at 1.1549% having risen to 1.188%, its highest since March 20, 2020. At the other end of the curve the yield on the 2-year note, seen as an indicator of inflation expectations, was down almost a basis point at 0.1072% after matching its all-time low of 0.105% last reached May 8, 2020. The movement left the closely watched part of the U.S. Treasury yield curve measuring the gap between yields on the two notes, seen as an indicator of economic expectations, at 105 basis points, about 3 basis points higher than Thursday"s close and its highest since May 2017. Priya Misra, TD Securities head of global rates strategy, said the volatile trading showed investors focused on incremental news about spending talks in Washington after the morning"s jobs report did not offer a clear case for either political parties" priorities. Expectations "are all over the place," she said. U.S. employment growth rebounded less than expected in January and job losses the prior month were deeper than initially thought, strengthening the argument for additional relief money from the government to aid the recovery from the COVID-19 pandemic. Analysts described the results as having mixed implications for government bond markets and giving traders a chance to take profits after yields on longer-term U.S. notes rose in recent days. "The jobs report isn’t bad. You should expect a lot of volatility at a time like this," said Subadra Rajappa, head of U.S. Rates Strategy for Societe Generale in New York. The unemployment rate was at 6.3% in January, which Rajappa said put it close to achieving the 5% targeted by the U.S. Federal Reserve. U.S. stocks rose on Friday with the S&P 500 and the Nasdaq hitting record highs as stimulus talks, upbeat earnings and progress in vaccine rollouts bolstered bets of a speedy economic recovery. February 5 Friday 12:26PM New York / 1726 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0325 0.033 -0.005 Six-month bills 0.045 0.0456 -0.007 Two-year note 100-9/256 0.1072 -0.008 Three-year note 99-214/256 0.1811 -0.008 Five-year note 99-150/256 0.4592 0.000 Seven-year note 99-144/256 0.8146 0.006 10-year note 97-108/256 1.1549 0.016 20-year bond 93-152/256 1.7601 0.019 30-year bond 92-172/256 1.9507 0.019 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.25 0.75 spread U.S. 3-year dollar swap 9.75 0.50 spread U.S. 5-year dollar swap 12.00 0.25 spread U.S. 10-year dollar swap 7.25 0.25 spread U.S. 30-year dollar swap -21.25 0.75 spread (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis, Kirsten Donovan)