Consumer spending increases 0.2 in August
PCE price index gains 0.1; rises 2.2 yearonyear
Core PCE inflation index rises 0.1; up 2.7 yearonyear
Goods trade deficit narrows 8.3 to 94.3 billion

WASHINGTON, Sept 27 Reuters U.S. consumer spending increased slightly less than expected in August, suggesting some moderation in economic growth in the third quarter, while the annual rise in prices was the smallest in just over 312 years.

A solid pace of economic growth this quarter, however, remains in the cards as other data from the Commerce Department on Friday showed the goods trade deficit narrowed by the most in nearly two years last month.

Economists did not see the spending and inflation data as weak enough to compel the Federal Reserve to deliver another 50 basis points interest rate cut in November as hoped by investors.

All things considered, this month39;s report does not nudge the Fed in the direction of another forceful 50 basis points cut in November, said Olu Sonola, head of U.S. economic research at Fitch Ratings. Two 25 basis points cuts still seem more likely in November and December.

Consumer spending, which accounts for more than twothirds of U.S. economic activity, rose 0.2 last month after an unrevised 0.5 gain in July, the Commerce Department39;s Bureau of Economic Analysis said. Economists polled by Reuters had forecast consumer spending climbing 0.3.

Spending was concentrated in services, with outlays on housing as well as financial services…