* U.S. jobless claims fall, briefly lift yields * Focus on non-farm payrolls for April * U.S. yield curve steepens for 5th day * U.S. 5-year breakeven inflation backs off 10-year high (Adds new analyst comments, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, May 6 (Reuters) - U.S. Treasury yields weakened on Thursday in a choppy session, moving within narrow ranges, as investors largely shrugged off better-than-expected initial jobless claims data and instead looked ahead to Friday"s key non-farm payrolls report. U.S. payrolls will likely confirm the economy"s solid path to recovery from the pandemic, analysts said. Economists expect 978,000 new U.S. jobs for April, according to a Reuters poll. Analysts said whisper numbers suggested that Friday"s report could show a rise of more than one million jobs. The yield curve, meanwhile, flattened for a fifth straight day, as yields on the long end stalled amid increased investor demand with the Federal Reserve repeatedly affirming its dovish stance. The spread between U.S. 2-year and 10-year yields slid to 140 basis points. "I"d say positions are being squared or shorts covered, which is counter to the bearish narrative," said Steve Feiss, managing director, fixed income, at broker-dealer Etico Partners. "Inflation remains a near-term risk but so far, the word "transitory" remains a key hope and a single 1 million jobs non-farm payrolls print is only just beginning," he added. U.S. yields briefly inched higher after data showed initial claims for state unemployment benefits totaled a seasonally adjusted 498,000 for the week ended May 1, compared with 590,000 in the prior week. That was the lowest since mid-March 2020, when mandatory shutdowns of nonessential businesses were enforced to slow the first wave of COVID-19 infections. Economists polled by Reuters had forecast 540,000 applications in the latest week. In afternoon trading, the U.S. 10-year Treasury yield fell to 1.56%, from 1.584% late on Wednesday. U.S. 30-year yields were down at 2.235% from Wednesday"s 2.256%. U.S. 5-year note yields, which typically reflect interest rate expectations, rose to 0.796% from Wednesday"s 0.803%. Going into Friday"s non-farm payrolls, BMO Capital said in its latest research note that earlier U.S. numbers that serve as proxies for the jobs data bode well, with eight positive reports, and only three negative ones. That said, it pointed out that even another 1 million-plus jobs added back to the economy would not be sufficient to "meaningfully alter the current trading paradigm in the U.S. rates market." The U.S. five-year breakeven inflation backed off a 10-year high of 2.696% hit on Wednesday. It was last at 2.658% . "It appears Treasuries are buying into the FOMC"s relatively benign (inflation) outlook and concurs price pressures will be transitory," Action Economics said in its blog. May 6 Thursday 2:57PM New York / 1857 GMT Price Current Net Yield % Change (bps) Three-month bills 0.015 0.0152 -0.003 Six-month bills 0.0375 0.038 -0.003 Two-year note 99-240/256 0.1566 -0.002 Three-year note 100-48/256 0.3109 0.000 Five-year note 99-196/256 0.7981 -0.005 Seven-year note 100-8/256 1.2453 -0.012 10-year note 96-12/256 1.5625 -0.021 20-year bond 95-240/256 2.1277 -0.019 30-year bond 92-40/256 2.2372 -0.021 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.75 -0.50 spread U.S. 3-year dollar swap 13.75 -0.50 spread U.S. 5-year dollar swap 9.75 -0.25 spread U.S. 10-year dollar swap -1.50 -0.50 spread U.S. 30-year dollar swap -27.00 -0.25 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum and Marguerita Choy) Our Standards: The Thomson Reuters Trust Principles.