(Adds auction results, updates prices) By Chuck Mikolajczak NEW YORK, Sept 9 (Reuters) - Longer-dated U.S. Treasury yields moved lower on Thursday after a strong auction for 30-year Treasury bonds closed out $120 billion in coupon-bearing supply this week. A $24 billion 30-year bond auction was strong, analysts said, and yields on both the benchmark 10-year and 30-year hit session lows following its completion. Yields had been trending higher earlier in the day before reversing course heading into the auction following data on the labor market and a policy announcement from the European Central Bank. The Labor Department said weekly initial jobless claims fell by 35,000 to a seasonally adjusted 310,000, the lowest level in almost 18 months, and better than the 335,000 forecast. The ECB said it would slow its emergency bond purchases implemented during the COVID-19 pandemic over the coming quarter, which ECB President Christine Lagarde said was not tapering, but refrained from detailing how it plans to end its 1.85-trillion-euro Pandemic Emergency Purchase Programme (PEPP). "It felt like coming into the morning that we were going to get maybe closer to 2% if you had to pick a direction you would have figured we would back up a little bit," said Tom Simons, a money market economist at Jefferies in New York. "Instead, the market rallied through that period where you would figure it would build in the concession and now that the supply is out of the way, the market rallied again." Investors have been focused on the path of the U.S. Federal Reserve"s policy, with several Fed officials recently saying a slowdown in job growth won"t derail the central bank"s plan to cut its own asset purchases this year, even after Friday"s payrolls report missed expectations. The yield on 10-year Treasury notes was down 4.3 basis points at 1.297%, after hitting a daily low of 1.287%, its lowest since Sept. 3. The yield on the 30-year Treasury bond was down 5.4 basis points at 1.898% after falling to 1.885%, its lowest since Aug. 31. Auctions of 4-week and 8-week bills also went well, analysts said. Simons said both are reflecting the uncertainty surrounding the possible expiration of the U.S. debt ceiling and the lack of clarity as to exactly when Treasury"s extraordinary measures to make more borrowing authority would run out. Congressional debate is expected to intensify in the coming weeks over the debt ceiling issue with the Treasury due to run out of money sometime in October. Without an extension to the Treasury"s borrowing limits, the risk of a technical default will weigh on short-term debt. On Wednesday, U.S. Treasury Secretary Janet Yellen again pressed Congress to address the limit on federal government borrowing, while U.S. House of Representatives Speaker Nancy Pelosi said Democrats will not include a provision to raise the debt ceiling in a $3.5 trillion "reconciliation" spending measure they aim to pass in the coming months. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on 2- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 108.1 basis points, down from a near two-month high of 116.4 on Tuesday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 0.4 basis point at 0.214%. September 9 Thursday 2:44PM New York / 1844 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0475 0.0482 0.002 Six-month bills 0.05 0.0507 -0.002 Two-year note 99-211/256 0.2144 -0.004 Three-year note 99-210/256 0.4354 -0.008 Five-year note 99-212/256 0.7853 -0.021 Seven-year note 100-80/256 1.0783 -0.033 10-year note 99-144/256 1.2971 -0.043 20-year bond 98-200/256 1.8232 -0.051 30-year bond 102-84/256 1.8977 -0.054 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.25 0.25 spread U.S. 3-year dollar swap 10.25 0.00 spread U.S. 5-year dollar swap 9.00 0.00 spread U.S. 10-year dollar swap 2.50 0.25 spread U.S. 30-year dollar swap -25.25 0.50 spread (Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)