NEW YORK (Reuters) - U.S. Treasuries extendedearlier losses Thursday after data showed business activityand labor conditions were not as dismal as some traders hadfeared, reducing safe haven demand for bonds.

The U.S. Labor Department said jobless claims fell to451,000 in the week ended Sept 4, down from an upwardly revised 478,000 in the prior week. Analysts polled by Reutershad expected a figure of 470,000.

Moreover, the United States' trade deficit shrank to $42.78 billion in July, and also was smaller than the $47.3billion gap predicted by economists.

The benchmark 10-year Treasury note's price, which movesinversely to its yield was down 13/32 for a yieldof 2.70 percent, versus 2.68 percent shortly before the data.It ended at 2.65 percent in New York on Wednesday.

(Reporting by Richard Leong, Editing by Chizu Nomiyama )