TREASURIES-U.S. bond prices fall, yield curve flattest since Aug

* U.S (Other OTC: UBGXF - news) . yield curve holds at flattest since August

* Growing consensus on Fed raising rates in December

* Gradual U.S. rate rises seen after liftoff (New (KOSDAQ: 160550.KQ - news) throughout, updates prices and market activity, adds analyst comments)

By Tariro Mzezewa

NEW YORK, Nov 20 (Reuters) - U.S. Treasuries prices fell on Friday in choppy trading, with rising U.S. stock prices reducing the appeal of lower-yielding government debt as investors grew confident that an expected U.S. interest rate increase would not impede corporate profits.

On the week, longer-dated issues performed better than shorter ones after the U.S. Federal Reserve on Wednesday released minutes from its October policy meeting. Those minutes reinforced expectations of a December rate liftoff and thereafter, a gradual pace of rate increases.

"The longer end is outperforming because inflation is quite low and there's a benign outlook on prices. If the Fed is going to hike, that will keep inflation low," said Kim Rupert, managing director of global fixed-income analysis at Action (LSE: 0LQX.L - news) Economics in San Francisco.

The yield curve had flattened with the gap between five-year and 30-year Treasury yields hovering at its tightest since August. The five-year and 30-year yield spread was 1.33 percentage points, little changed from Thursday.

Wall Street stocks were headed for their strongest week in more than a month, led by healthcare and consumer stocks. The rally was stoked partly by the view that the Fed would raise rates gradually.

"We've seen a nice bounce in stocks as they've digested to the likelihood of a December rate hike," said Rupert.

The yield curve had flattened also as investors received fairly upbeat data on jobless claims and manufacturing in the mid-Atlantic region on Thursday.

Meanwhile, the Fed's minutes and remarks from several Fed officials this week buttressed a view that the central bank will raise rates gradually.

"The pace of increases may be somewhat slow and possibly more halting than historic episodes of rising rates," said Atlanta Fed President Dennis Lockhart in a speech to a business group in Atlanta (BSE: ATLANTA.BO - news) on Thursday.

Benchmark 10-year Treasuries were down 5/32 in price for a yield of 2.264 percent, up 2 basis points from late on Thursday.

The 30-year bond was down 11/32 in price to yield 3.021 percent, up about 2 basis points from Thursday, while the five-year note was down 2/32 in price to yield 1.688 percent, up 2 basis points. (Editing by Bernadette Baum and David Gregorio)