Updated: 29-Feb-24 09:38 ET
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Updated: 29-Feb-24 09:38 ET |
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Highlights
- Personal income increased a hefty 1.0% month-over-month in January (Briefing.com consensus 0.5%), bolstered by the 3.2% cost-of-living adjustment for social security recipients.
- Nominal personal spending was up just 0.2% month-over-month, as expected. Real personal spending was down 0.1%, the result of a 0.3% month-over-month increase in the PCE Price Index (Briefing.com consensus 0.4%).
- The core-PCE Price Index, which excludes food and energy, was up 0.4%, as expected.
- On a year-over-year basis, the PCE Price Index was up 2.4%, versus 2.6% in December, and the core-PCE Price Index was up 2.8%, versus 2.9% in December.
Key Factors
- Real disposable personal income was flat month-over-month and was up 2.1% year-over-year versus 4.2% in December.
- Real PCE was down 0.1% month-over-month and was up 2.1% year-over-year versus 3.2% in December.
- Wages and salaries increased 0.4% month-over-month following a 0.5% increase in December.
- Rental income increased 1.6% on the heels of a 0.3% increase in December.
- Personal income receipts on assets surged 2.1%, driven by a 4.1% increase in personal dividend income.
- Prices for goods declined 0.2%, extending the streak of monthly declines to four. Prices for services were up 0.6% following a 0.3% jump in December.
- The personal savings rate as a percentage of disposable income edged up to 3.8% from 3.7%.
Big Picture
- The key takeaway from the report will revolve around the year-over-year disinflation seen in the PCE Price Indexes and the softening in real personal spending, which should temper Q1 GDP growth forecasts. So, disinflation paired with slower growth are conditions the market will think are going to promote rate-cut thinking at the Fed in due time.
Category |
JAN |
DEC |
NOV |
OCT |
SEP |
Personal Income |
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Total Income |
1.0% |
0.3% |
0.3% |
0.2% |
0.4% |
Wage and Salary |
0.4% |
0.5% |
0.4% |
0.2% |
0.5% |
Disposable Income |
0.3% |
0.3% |
0.4% |
0.3% |
0.3% |
Savings Rate |
3.8% |
3.7% |
4.1% |
4.1% |
3.9% |
Personal Consumption |
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Total (Nominal) |
0.2% |
0.7% |
0.4% |
0.1% |
0.7% |
Total (Real, Chain $) |
-0.1% |
0.6% |
0.4% |
0.1% |
0.4% |
Core PCE Deflator |
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Month/Month |
0.4% |
0.1% |
0.1% |
0.2% |
0.3% |
Year/Year |
2.8% |
2.9% |
3.2% |
3.4% |
3.6% |