* Fed launches third big round of stimulus until jobs outlook better * Treasury sells $13 billion in 30-year bonds * U.S. jobless claims rose more than expected due to storm By Richard Leong and Luciana Lopez NEW YORK, Sept 13 (Reuters) - U.S. government debt prices gave up early gains and fell sharply o n T hursday after the Federal Reserve announced a third big round of stimulus aimed squarely at lowering stubborn unemployment. Treasury prices sank after the Fed said it would buy $40 billion of mortgage debt per month and keep buying assets until the jobs outlook improves substantially. Some analysts said the program was less than the market had expected from a third round of quantitative easing, or QE3. "The Fed has under-delivered here. This not full-blown QE3. They have a lot of flexibility with this statement," said Anthony Valeri, a fixed income Strategist at LPL Financial in San Diego. "The long end of the bond market is weaker because there were expectations of a longer-dated Treasuries purchase announcement from the Fed. That's why we are seeing a reversal here after a pretty good 30-year bond auction," he added. The U.S. Treasury Department sold $13 billion of 30-year bonds earlier in the day, in what analysts said was a strong auction. In an additional move that reflects just how concerned they are about the economy, Fed officials said they were unlikely to raise interest rates from current rock-bottom lows until at least mid-2015, compared with previous guidance of late 2014. The Fed's decision to buy mortgage-backed securities instead of Treasuries "will likely disappoint market participants as the yield curve steepens quickly after traders who positioned themselves ahead of the announcement reverse positions and sell Treasuries," said Chris Jarvis, president of Caprock Risk Management in Rye, New Hampshire. The FOMC "emphasized that it expects a highly accommodative stance on monetary policy to remain appropriate for a considerable time after the economic recovery strengthens," Fed Chairman Ben Bernanke said on Thu rsday after the announcement. Thirty-year bonds traded 1-05/32 lower to yield 2.979 percent, after the yield briefly pierced 3 percent for the first time in about four months. The latest figures on U.S. jobless claims and producer prices did not cause much market reaction earlier in the day. The data largely reinforced the view of low employment growth and inflation. First-time filings for jobless benefits totaled 382,000 last week, higher than what economists had forecast. The Labor Department blamed the larger-than-expected weekly increase on Tropical Storm Isaac. At the same time, the agency said producer prices rose 1.7 percent in August, the biggest monthly increase since June 2009. But the core rate, which excludes volatile energy and food prices, grew 0.2 percent, in line with estimates.