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

declined on Wednesday as investors piled into U.S. government

bonds following weak consumer sentiment surveys in Europe, while

U.S. inflation concerns took a temporary backseat as data came

in line with estimates.

Data on Wednesday showed German consumer sentiment dropped

more than expected, while French consumer confidence fell to a

five-month low in November.

U.S. gross domestic product growth remained unchanged at 2.8% in

the third quarter, an updated estimate showed on Wednesday,

although there was a slight downward revision to consumer

spending.

A separate report by the Labor Department showed the number

of Americans continuing to collect unemployment claims rose to

1.9 million, suggesting many laid-off workers are finding it

difficult to land new jobs.

The most crucial piece of economic information on Wednesday,

ahead of the Thanksgiving holiday on Thursday, was the Personal

Consumption Expenditures price index, which came in line with

expectations, having increased 0.2% on the month and 2.3% on the

year. Core PCE, which strips out volatile food and energy items

and is the Fed's preferred gauge of inflation, was also in line

with estimates.

While inflation remained elevated and above the Fed's 2%

target, the bond market reaction was muted.

"Inflation is fading as an issue as investors shift to

cyclical growth," said David Russell, global head of market

strategy at TradeStation.

Concerns about a rebound in inflation resurfaced this week after

President-elect Donald Trump pledged to impose punitive tariffs

on imports from Canada, Mexico, and China.

"It used to be the economy and then the election ... And now

it's still the economy," said Jack McIntyre, global fixed income

portfolio manager at Brandywine Global.

"And if you look at the economy ... The Fed may cut, even if

it's going to be a hawkish cut," he said, referring to the U.S.

central bank's next rate-setting meeting in December.

Rates futures traders were assigning a 66% probability to a

25-basis-point rate cut by the Fed next month, CME Group data

showed on Wednesday, up from a 59% chance on Tuesday.

Benchmark 10-year yields were last at 4.265%,

nearly four basis points lower than on Tuesday. Two-year yields

were also about three basis points lower at 4.223%.

Later on Wednesday the Treasury will sell $44 billion in

seven-year notes, following two- and five-year note auctions

that have been well received by the market this week.