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Monday, March 28, 2011

Personal Income Up 0.3%, Consumption Up 0.7%

In February, personal income rose by 0.3% following a payroll tax reduction induced jump of 1.3% in January. Wages and salaries also grew by 0.3% over the month, the third straight gain of that size. From a year prior, personal income was 5.1% higher.

Personal consumption rose by a larger 0.7% over the month. The gain was driven by a large jump up in durable goods spending. Services spending growth continued a recent trend of lagging goods consumption growth. From a year prior, consumption spending was 4.1% higher.

The higher growth rate of consumption relative to income over the month caused the savings rate fall back slightly to 5.8% from 6.1% in January. Savings have been modestly higher in the past few months relative to the second half of last year.

As measured by the PCE deflator, prices increased 0.4% over the month, primarily due to energy prices. The PCE has risen considerably in the past three months. Still from a year prior, the PCE deflator was only 1.6% higher. However, this was up from 1.0% as recently as November. The core PCE deflator, which excludes energy and food prices, rose by a lesser 0.2% over the month and was 0.9% higher than a year prior.















































































m/m % changeFebJanDecNovOctSep
Personal Consumption0.70.30.40.30.70.3
    Real0.30.00.10.20.50.2
Personal Income0.31.20.50.30.50.0
    Real-0.10.90.20.20.3-0.1
PCE Deflator0.40.30.30.10.20.1
    Core PCE Deflator0.20.20.00.10.00.0
Savings Rate (level)5.86.15.65.55.55.8




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