U.S. consumer spending edged up a moderate 0.3 percent in August, the smallest gain in six months, as purchases of cars and other durable goods fell. A key gauge of inflation slowed slightly after posting its biggest annual gain in six years.

The Commerce Department said Friday that the rise in spending was the weakest since spending fell 0.1 percent in February. Spending had been up 0.4 percent in July. Consumer spending is closely watched because it accounts for two-thirds of economic activity.

An inflation gauge closely watched by the Federal Reserve edged up 0.1 percent in August, a tiny gain which left prices rising 2.2 percent over the past 12 months, down from a 2.3 percent 12-month rise in July which had been the fastest pace in six years.

Source: The Associated Press