TREASURIES-Two-year yields hit 5-1/2 year highs after U.S. jobs data

* U.S (Other OTC: UBGXF - news) . Oct (HKSE: 3366-OL.HK - news) . jobs data stronger-than-expected

* U.S. 2-yr yields hit 5-1/2-yr highs

* 10-yr yields hit over 3-month highs

* Dec. Fed rate hike expectations bolstered

By Sam Forgione

NEW YORK, Nov 6 (Reuters) - U.S. Treasury yields soared on Friday, with two-year yields hitting their highest levels in five and a half years, after stronger-than-expected U.S. nonfarm payrolls data for October bolstered expectations for a December Federal Reserve rate hike.

U.S. nonfarm payrolls increased 271,000 last month, the largest rise since December 2014, the Labor Department said, beating economists' expectations for an increase of 180,000 jobs according to a Reuters poll. In addition, the unemployment rate hit a 7-1/2-year low last month.

"This is a blow-out number," said Kevin Giddis, head of fixed income capital markets at Raymond James in Memphis, Tennessee. "There's a pretty strong feeling that the Fed is going to hike rates a quarter of a point in December."

U.S. two-year yields hit 0.958 percent, their highest since May 2010. U.S. three-year yields hit 1.281 percent, their highest level in four and a half years. U.S. five-year yields hit 1.774 percent, their highest level in nearly five months.

Benchmark 10-year yields hit 2.338 percent, their highest level in over three months, while 30-year yields hit 3.078 percent, their highest level in over seven weeks.

"If we continue to get strong numbers like the ones in this report, it will lead investors to consider more rate hikes in the first half of 2016 than what is currently being priced in," said Roger Bayston, director of fixed income at Franklin Templeton Fixed Income Group in San Mateo, California.

Rates futures implied traders see a 70 percent chance of a Fed rate increase next month, up from a 58 percent at Thursday's close and up from 5 percent a month ago, according to CME Group's FedWatch program.

Benchmark 10-year Treasury notes were last down 22/32 in price to yield 2.325 percent, from a yield of 2.245 percent late Thursday. U.S. two-year notes were last down 3/32 to yield 0.898 percent, from a yield of 0.842 percent late Thursday. (Reporting by Sam Forgione)