NEW YORK, June 27 (Reuters) - U.S. Treasury yields

declined slightly on Thursday after economic data showed a

continued, though moderate, slowdown in economic activity.

First-time applications for U.S. unemployment benefits

drifted lower last week, which could assuage concerns over a

material deterioration in the labor market. At the same time,

so-called continuing claims for unemployment benefits increased

18,000 to a seasonally adjusted 1.839 million during the week

ending June 15, the highest since November 2021.

Also on the calendar on Thursday, the Commerce Department's

Bureau of Economic Analysis released estimates showing gross

domestic product increased at a revised 1.4% annualized rate

last quarter, up from a previous 1.3% estimate.

"The 1.4% reading is solid, but indicates that economic

growth is slowing, although still comfortably above recession

levels," said Chris Zaccarelli, chief investment officer for

Independent Advisor Alliance, in a note. Growth was 3.4% in the

fourth quarter last year.

Importantly, real consumption growth was revised down to

1.5% from 2%, indicating a slowdown in consumer spending due to

a combination of high interest rates and sticky price pressures.

Benchmark 10-year yields, which move inversely

to prices, dropped after the data and were last at 4.286%, three

basis points lower than on Wednesday. Two-year yields

, which more closely indicate monetary policy

expectations, were down by nearly three points to 4.72%.

Still, yields remained overall in line with recent levels,

as investors weighed signs of the economy slowing against a

number of factors, including the rising U.S. government debt

burden, that could delay a much anticipated shift by the Federal

Reserve to a less restrictive monetary policy stance.

"I don't think this combination of data says deceleration

and the Fed is going to start cutting," said Kathryn Rooney

Vera, chief market strategist at StoneX.

Unless price pressures drop sharply over the coming months,

the Fed is unlikely to lower rates until December, she said.

Investors on Thursday were pricing for nearly two 25 basis

point rate cuts this year but will be looking for more clues on

the path of interest rates with the release of personal

consumption expenditure inflation data on Friday.

Also on investors' radars will be a face-off between U.S.

President Joe Biden and Republican former president Donald Trump

in a TV debate later on Thursday.

"If Trump does well ... (and) it becomes clearer that one

party is going to be able to control the presidency and the

Congress, then I think Treasury yields will probably move

higher," said Brij Khurana, fixed income portfolio manager at

Wellington Management.

Later on Thursday, the Treasury will sell $44 billion in

seven-year notes, the last of a total of $183 billion in coupon

debt sales this week that have been met with solid investor

demand so far.