NEW YORK, Aug 9 Reuters U.S. Treasury yields fell on Friday after a volatile week, which was driven by concerns about the U.S. economic outlook, while investors turned to key inflation data next week for fresh clues on the potential size of an expected September rate cut.

Yields have regained ground over the week after a dramatic bond rally sent them to more than oneyear lows on Monday, with stock markets also recovering from a rout that was in part blamed on the unwind of popular dollaryen carry trades.

A biggerthanexpected drop in jobless claims on Thursday also helped ease worries about the possibility of an imminent U.S. recession. Concerns rose after last Friday39;s nonfarms payroll report showed an unexpected increase in unemployment.

The main theme of the bond market at the beginning of the month was concerns about the state of the labor market and the future path of the Fed, said Lou Brien, market strategist at DRW Trading in Chicago. Then there was a lot of noise that was added onto markets because of the Yen carry trade.

That trade involves borrowing yen at a low cost to finance U.S. asset purchases, including tech stocks. A sharp rise in the yen against the U.S. dollar, however, led traders to unwind these positions.

Consumer price data on Wednesday is the next major data point that is expected to show that inflation continues to edge down closer to the Feds 2 annual target.

Annual core price growth is expected to slow to 3.2 in July, from 3.3 in June,…