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UPDATE 1-TREASURIES-U.S. Treasury yields steady on growth, consumer spending reports

Ross Kerber

reports@ (Adds details on stock markets, consumer sentiment, updates market activity) BOSTON, Dec 20 (Reuters) - U.S. Treasury yields were steady on Friday as investors took stock of relatively strong economic growth and consumer spending reports. The benchmark 10-year yield was up less than a basis point at 1.9153% in afternoon trading, after reaching as high as 1.947%. Analysts pointed to a Commerce Department report showing gross domestic product increased at a 2.1% annualized rate in the third quarter, unrevised from the previous estimate. The economy grew at a 2.0% pace in the second quarter. The report suggested a continuation of economic growth and reinforced a sense of business momentum, said Stan Shipley, macro research analyst at Evercore ISI. "Stocks are up and oil is trending higher. People are shifting their allocations, which became very defensive several months ago on recession concerns. Now the odds of that are very low," Shipley said. The S&P 500 hit a record high for a seventh straight session on Friday, as continued optimism on resolving the U.S.-China trade war and strength in domestic consumer spending lifted sentiment. The Commerce Department's unrevised reading was in line with economists' expectations, but consumer spending was stronger than previously reported. There were also upgrades to business spending on non-residential structures such as power infrastructure. Consumer spending is being supported by the lowest unemployment rate in nearly half a century. But inflation stayed tame last month and could remain so for a while. The University of Michigan's survey of consumers showed households' one-year inflation expectations fell in December to 2.3%, the lowest in three years, from 2.5% in November. The two-year yield, which typically moves in step with interest rate expectations, was up less than a basis point to 1.6294% in afternoon trading. December 20 Friday 3:13PM New York / 2013 GMT

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(Reporting by Ross Kerber; Editing by Dan Grebler and Richard Chang)