TREASURIES-Yields higher in light trading, inflation in focus

* Bond market to close early after Thanksgiving holiday

* Inflation in focus, personal consumption data due next Thursday

* Treasury to sell $88 bln new supply next week

NEW YORK, Nov 24 (Reuters) - U.S. Treasury yields rose slightly on Friday but stayed within a tight range they have held in for the past week-and-a-half as investors focused on the inflation outlook. Concern about stubbornly low inflation has boosted longer-dated debt and sent the U.S. Treasury yield curve to its flattest levels in a decade. Minutes from the Federal Reserves most recent meeting, which were released on Wednesday, showed some of the members who vote on policy expressed concern over the inflation outlook, though most agreed that tightness in the labor market would likely fuel higher inflation in the medium term. There was a little bit more concern within the committee with the state of inflation and its potential to return to normal levels, said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

Benchmark 10-year notes were last down 4/32 in

price to yield 2.34 percent, up from 2.32 percent on Wednesday. The yields have held between 2.32 percent and 2.38 percent since Nov. 15. The yield curve between two-year and 10-year notes was 59 basis points, just above the 57 basis point level reached on Tuesday, which was the flattest since late 2007. Trading was subdued with many traders out after Thursdays Thanksgiving holiday. The bond market will close early on Friday at 2 p.m. EST. (1900 GMT) Yields rose earlier on Friday in line with German government bonds after Germany's Social Democrats bowed to pressure from across the political spectrum on Friday to help form a new government led by Chancellor Angela Merkel. The turnabout by the centre-left party could help avert a disruptive repeat election in Europe's economic and political powerhouse. Black Friday retail sales will be watched for further clues about consumer spending and the strength of the U.S. economy. It is always a make or break period for a lot of retailers and that will be an important indicator as people think about the health of the economy in the year ahead, Lyngen said. Next week is likely to bring bond buying for month-end extensions, while the Treasury Department is due to sell $88 billion in short- and intermediate-dated supply. This will include $26 billion in two-year notes, $34 billion in five-year notes and $28 billion in seven-year notes.

Next weeks data will include personal income and spending, which will be watched for any signs that inflation may be picking up.

(Editing by Chizu Nomiyama)