NEW YORK — Treasury prices fell Wednesday despite a decent note auction, as investors grew more hesitant about pouring money into government debt.

The Treasury Department sold a record $30 billion in three-year notes to more than twice as many bids as notes available. Still, there's a sense that demand will eventually taper off.

Kim Rupert, managing director of global fixed income analysis at Action Economics, pointed out that the government used to auction about $10 billion to $14 billion in three-year notes on a quarterly basis; now, they're auctioning off $30 billion on a monthly basis.

"There's the sheer knowledge that we've got tons of supply down the road," Rupert said, adding that a weak auction of German bonds Wednesday was seen by many as a sign of a plateau in demand. "It makes it tough to buy Treasurys at these prices."

Treasury prices remain lofty, but have been pulling back in recent days as credit markets have started to thaw and investors grow more concerned about Treasury supply, while being more confident about buying mortgage-backed securities. Mortgage-backed securities are now being purchased by the Federal Reserve.

President-elect Barack Obama has proposed slashing taxes and helping businesses revive the economy, but the package is estimated to cost as much as $775 billion _ which will likely force the Treasury to keep selling more and more debt to finance the efforts. A jump in Treasury supply, if it's not met with a similar jump in demand, tends to result in lower Treasury prices.

In late trading, despite a steep pullback in the stock market, the two-year Treasury note also fell 2/32 to 100 3/32, and its yield rose to 0.83 from 0.78 percent late Tuesday. The 10-year note fell 11/32 to 110 28/32, and its yield rose to 2.50 percent from 2.47 percent. The 30-year Treasury bond fell 25/32 to 128 5/32, and its yield rose to 3.04 percent from 3.01 percent, according to BGCantor Market Data.

The yield on the three-month T-bill, considered one of the safest short-term investments, dipped to 0.11 percent from 0.14 percent. Its discount rate was 0.11.

In economic data, the ADP National Employment Report said early Wednesday that private sector employment fell by 693,000 in December, worse than analysts predicted. The unofficial data was a gloomy sign that the Labor Department's payroll figures on Friday might also be disappointing.

As of midday Wednesday, economists surveyed by Thomson Reuters/IFR expected the Labor Department _ which reports on both private sector and government jobs _ to report Friday that U.S. employers shed 500,000 jobs last month, according to the median estimate. Economists expect the unemployment rate to have jumped to 7.0 percent from 6.7 percent.

But in a positive sign that mortgage and other consumer rates should decline, bank-to-bank lending rates dropped Wednesday. The London Interbank Offered Rate, or Libor, on three-month loans in dollars dipped 0.01 percentage points to just below 1.40 percent. That is the lowest level since the British Bankers' Association started monitoring the rate.