* Surveys show downturn in euro zone businesses * U.S. weekly jobless claims rise by more than expected * Philly Fed business conditions in January lowest in 8 months * Treasuries underpinned by concern over government spending cuts By Chris Reese NEW YORK, Feb 21 (Reuters) - U.S. Treasuries rose on Thursday as worries over a lack of economic recovery in Europe, along with a struggling labor market and tepid business conditions in the U.S., prompted investors to buy assets perceived as safe havens. Treasuries were bolstered early in the day as prospects the debt-laden euro zone might soon emerge from recession were shaken, with surveys showing business indicators unexpectedly worsened this month, especially in France. Prices extended gains after data showing the number of Americans filing new claims for unemployment benefits rose by more than expected last week. Prices were also bolstered after the Federal Reserve Bank of Philadelphia's index of business conditions was shown to have fallen in February to the lowest since June 2012. "This data suggests the economy might not be as strong as people are expecting," said Adam Sarhan, chief executive of Sarhan Capital in New York. Benchmark 10-year Treasury notes were trading 12/32 higher in price to yield 1.97 percent, down from 2.01 percent late Wednesday but still well within the 1.93 percent to 2.06 percent range that has held sway for over three weeks. "The job market is gradually improving but not fast enough for the Fed to remove accommodation. We still think a Fed rate hike is a late 2014 to early 2015 event. They might taper off bond purchases in the fourth quarter," said Jacob Oubina, senior economist at RBC Capital Markets in New York. U.S. bonds weakened briefly on Wednesday as the latest minutes from the Federal Open Market Committee showed policymakers discussed slowing or stopping Federal Reserve bond purchases aimed at reducing unemployment. They later rebounded as a sharp fall in stock prices rekindled some safe-haven bids for bonds. The Fed on Thursday was buying $3 billion to $3.75 billion of Treasuries maturing November 2018 through February 2020 as part of its latest economic stimulus program. The central bank is purchasing $45 billion per month of Treasuries and $40 billion per month of mortgage-backed securities in an effort to reduce unemployment and spur economic recovery. Treasuries prices remain underpinned by concerns over the potential economic impact of $85 billion of automatic government spending cuts set to kick in March 1. Few analysts expect Republicans and Democrats to reach any sort of budget agreement to avoid the cuts before the deadline. Outside of the Philadelphia Fed and weekly jobless claims data, the government said consumer prices were flat in January while U.S. home resales edged higher last month. There will also be an auction of 30-year Treasury Inflation Protected Securities later on Thursday. Ahead of the sale, 30-year Treasury bonds were trading 28/32 higher in price to yield 3.16 percent, down from 3.20 percent late Wednesday.