TREASURIES-Yields jump on surprisingly strong U.S. jobs data

* U.S. hiring last month best since early 2012

By Michael Connor

NEW YORK, Dec 5 (Reuters) - U.S. Treasuries prices dropped sharply on Friday after U.S. employers hired more workers in November than during any month in nearly three years, boosting expectations for the Fed to raise rates in the first half of 2015.

The robust report caused the yield on U.S. 2-year Treasuries to rise nearly 9 basis points to its highest since May 2011, according to Reuters data.

"This supports the view that the Federal Reserve will start hiking rates in the middle of next year," said Mohamed El-Erian, chief economic advisor at Allianz in Newport Beach, California.

The jobs figures caused a sharp selloff in short-dated U.S. Treasuries, and traders shifted bets on Federal Reserve's first round of interest-rate increases to July 2015, compared with September 2015 before the report.

That puts traders in line with the November Reuters poll of primary dealers, the majority of whom see the first interest-rate increase in June.

The benchmark 10-year Treasury note was off 16/32 and yielding 2.3136 percent. Yields on 30-year Treasuries briefly topped 3 percent and were last at 2.9596 percent, reflecting a price decline of 2/32.

Nonfarm payrolls surged by 321,000 last month, the most since January 2012, the Labor Department said on Friday. The unemployment rate held steady at a six-year low of 5.8 percent.

In addition, data for September and October were revised to show 44,000 more jobs created than previously reported.

"It is unequivocally bullish on the U.S. economy," said Anthony Valeri, fixed-income strategist at LPL Financial (NasdaqGS: LPLA - news) in San Diego. "We'll need more evidence but it definitely contradicts the low yield environment we have been in."

(Editing by W Simon)