* ADP payrolls show lower-than-expected job gains
* U.S. non-manufacturing index rises in Dec
* U.S. Treasury yields fall to multiweek lows (Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 5 (Reuters) - U.S. Treasury debt yields dropped broadly on Thursday, falling for a third straight session, as investors grew risk-averse amid uncertainty about the incoming Trump administration.
"What's going on in the rates markets is that we had a really powerful expectation of reflation priced in over an eight-week period," said Guy LeBas, chief fixed income strategist, at Janney Montgomery Scott LLC in Philadelphia.
"And that power is unjustified by some long-term fundamentals such as demographics and productivity in the U.S."
U.S. Treasuries had sold off, pushing yields higher, in the final quarter of last year, primarily due to the election of Donald Trump as U.S. president and the expectation of easier fiscal policy and higher interest rates based on his campaign promises of increased infrastructure spending and tax cuts.
Yields should rise again despite weakness early in the year, although for the next few weeks they likely will be range-bound as investors are in wait-and-see mode, said Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York.
"There's a lot of uncertainty until the next administration takes place," Lederer said. "We'll be in ranges until we know more about the Trump presidency."
Thursday's gains in Treasury prices were led by the intermediate sector of the curve, the U.S. five-year and seven-year notes. Their yields fell to four-week lows.
Long-dated U.S. debt yields also slid, with 30-year bonds sinking to five-week lows and 10-year notes to four-week troughs.
Buying in Treasuries also accelerated after weaker-than-expected U.S. private sector payrolls data earlier in the session.
The ADP National Employment Report showed that U.S. private employers added 153,000 jobs last month, below economists' expectations for a gain of 170,000.
Investors are now focused on Friday's U.S. non-farm payrolls report in which economists expected jobs gains of 178,000 in December.
U.S. data on initial jobless claims and the non-manufacturing index on Thursday painted a rosier picture of the economy, but did little to push yields higher.
In late trading, the U.S. 10-year note was up 25/32 in price to yield 2.358 percent, compared with 2.452 percent late on Wednesday. It hit a four-week low of 2.346 percent earlier.
U.S. 30-year bond prices were up more than a point, yielding 2.950 percent, a five-week low.
U.S. two-year note yields were at 1.174 percent from 1.234 percent on Wednesday. Earlier, two-year yields touched a three-week trough. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jeffrey Benkoe and Tom Brown)