* U.S. 7-year auction shows strong outcome * U.S. jobless claims fall more than expected * U.S. Q1 GDP growth rate rises * NY Fed"s reverse repo hits record volume of $485.3 bln (Adds U.S. 7-year note auction results, analyst comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, May 27 (Reuters) - U.S. Treasury yields rose on Thursday, bolstered by a New York Times report saying President Joe Biden will announce on Friday a $6-trillion budget for 2022, the largest spending since the second world war, fueling supply concerns. Yields, though, came off a little bit after another strong auction of U.S. 7-year notes. Treasury also auctioned 2-year and 5-year notes on Tuesday and Wednesday, yielding robust results as well. The 7-year note picked up a yield of 1.285%, compared with a when-issued or expected rate of 1.294% at the bid deadline, suggesting investors were willing to receive a lower yield for the note. The bid-to-cover ratio, another gauge of demand, was 2.41, higher than the 2.26 average analysts said. Analysts said the 7-year note benefited from a sell-off in Treasuries that set it up nicely for the auction. "The initial selloff in Treasuries was attributed to this morning"s budget headlines and the increase in rates left a solid intraday concession for 7s," said Ben Jeffery, rates strategist at BMO in a note after the auction. Investors typically sell Treasuries ahead of a note or bond sale to push yields higher so they can buy them at a lower price in a move called supply concession. The sell-off ahead of the auction accelerated after news of the proposed Biden"s budget for next year. The budget figure suggested that the U.S. government will be running deficits of more than $1.3 trillion through the next decade, according to the report. The report weighed on Treasury prices because it means the government would have to flood the market with more debt to finance the budget. "The supply fear is an easier thing to quickly price in," said Steve Feiss, managing director, fixed income, at broker-dealer Etico Partners. Thursday"s data on U.S. jobless claims and first-quarter gross domestic product growth also helped lift Treasury yields. Both reports showed the U.S. economy was on a stable path to recovery from the pandemic. Initial jobless claims dropped more than expected last week to a seasonally adjusted 406,000 for the week ended May 22, compared to 444,000 the prior week. That was the lowest since mid-March 2020. A separate report confirmed U.S. economic growth advanced in the first quarter at a 6.4% annualized rate, the government"s second estimate for the period, unrevised from the estimate reported last month and followed a 4.3% growth rate in the fourth quarter. In early afternoon trading, the U.S. 10-year Treasury yield rose to 1.607% from 1.574% late on Wednesday. U.S. 30-year yields were also up 2.288% from Wednesday"s 2.26%. Post-auction, U.S. 7-year yields were up at 1.259% , compared with 1.23% on Wednesday. In the repurchase market, the Federal Reserve"s reverse repo facility attracted record volume of $485.3 on Thursday. Bigger banks and other financial institutions have increasingly turned to the Fed for reverse repos to park excess cash. May 27 Thursday 2:02PM New York / 1802 GMT Price Current Net Yield % Change (bps) Three-month bills 0.01 0.0101 0.000 Six-month bills 0.03 0.0304 0.000 Two-year note 99-245/256 0.1466 0.000 Three-year note 99-212/256 0.3083 0.005 Five-year note 99-174/256 0.8155 0.018 Seven-year note 99-240/256 1.2594 0.029 10-year note 100-36/256 1.6096 0.036 20-year bond 100-200/256 2.2014 0.031 30-year bond 101-216/256 2.2896 0.030 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.00 0.25 spread U.S. 3-year dollar swap 11.75 1.00 spread U.S. 5-year dollar swap 6.75 -1.00 spread U.S. 10-year dollar swap -3.75 0.50 spread U.S. 30-year dollar swap -29.25 0.50 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Emelia Sithole-Matarise and Nick Zieminski) Our Standards: The Thomson Reuters Trust Principles.