Updated: 24-Feb-23 09:25 ET
| January Personal Income and Spending |
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| Updated: 24-Feb-23 09:25 ET |
Highlights
- Personal income increased 0.6% month-over-month in January (Briefing.com consensus +0.9%) following an upwardly revised 0.3% increase (from +0.2%) in December.
- Personal spending jumped 1.8% month-over-month (Briefing.com consensus +1.3%) following an upwardly revised 0.1% decline (from -0.2%) in December.
- The rub of this report, though, was the PCE and core-PCE Price indexes, which rubbed market participants the wrong way. The PCE Price Index increased 0.6% month-over-month (Briefing.com consensus +0.4%) following an upwardly revised 0.2% increase (from +0.1%) in December. The core-PCE Price Index, which excludes food and energy and is the Fed's preferred inflation gauge, also rose 0.6% month-over-month (Briefing.com consensus +0.4%) following an upwardly revised 0.4% increase (from 0.3%) in December. These changes left the PCE Price Index up 5.4% year-over-year, versus 5.3% in December, and the core-PCE Price Index up 4.7% year-over-year, versus 4.6% in December.
Key Factors
- Real personal spending was up 1.1% month-over-month and up 2.4% year-over-year (versus up 2.0% year-over-year in December).
- Real disposable personal income was up 1.4% month-over-month and up 2.8% year-over-year (versus down 0.8% year-over-year in December).
- Wages and salaries were up 0.9% month-over-month following a 0.4% increase in December.
- Proprietors' income was up 0.4% month-over-month following a 0.4% increase in December.
- Rental income was up 1.5% month-over-month after increasing 1.0% in December.
- Personal current transfer receipts were unchanged month-over-month after increasing 0.1% in December.
- The personal savings rate as a percentage of disposable income increased to 4.7% from 4.5% in December.
Big Picture
- The key takeaway from the report is the recognition that there isn't disinflation in this report. There is inflation in it, which is piquing concerns about inflation remaining sticky at higher levels for longer that, in turn, would prompt the Fed to stick to its tightening ways and stick with higher rates for longer than the market previously expected.
| Category | JAN | DEC | NOV | OCT | SEP |
| Personal Income | |||||
| Total Income | 0.6% | 0.3% | 0.4% | 0.9% | 0.5% |
| Wage and Salary | 0.9% | 0.4% | 0.4% | 0.5% | 0.8% |
| Disposable Income | 2.0% | 0.4% | 0.5% | 1.1% | 0.5% |
| Savings Rate | 4.7% | 4.5% | 4.0% | 3.4% | 3.0% |
| Personal Consumption | |||||
| Total (Nominal) | 1.8% | -0.1% | -0.2% | 0.7% | 0.6% |
| Total (Real, Chain $) | 1.1% | -0.3% | -0.3% | 0.3% | 0.3% |
| Core PCE Deflator | |||||
| Month/Month | 0.6% | 0.4% | 0.2% | 0.3% | 0.5% |
| Year/Year | 4.7% | 4.6% | 4.8% | 5.1% | 5.2% |