TREASURIES-Bonds add gains after spending, income data

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NEW YORK | Fri Oct 30, 2009 8:41am EDT

NEW YORK Oct 30 (Reuters) - U.S. government debt prices added small gains briefly on Friday after data showed personal spending fell and income posted no growth in September, supporting the view of a sluggish economic rebound.

The government said personal spending fell 0.5 percent in September, matching market expectations, while personal income was unchanged on the month. For more see [ID:nCAT002910].

Its index on core personal consumption expenditure, the Federal Reserve's preferred inflation gauge, was up 1.3 percent on a year-over-year basis. The figure was at the lower end of the Fed's perceived comfort range of 1.0 to 2.0 percent.

The price on benchmark U.S. 10-year notes US10YT=RR had been up as much 14/32, versus a 12/32 gain before the data.

Their yield, which moves inversely to price, briefly touched 3.44 percent, up from 3.45 percent prior to the data. The 10-year yield ended at 3.50 percent on Thursday. (Reporting by Richard Leong; Editing by James Dalgleish)

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