Personal consumption rose by a much smaller 0.2% in January. Spending growth was held back by weaker spending on services. From a year prior, consumption spending was 4.0% higher.
The slower growth rate of consumption relative to income over the month caused the savings rate to rise by four tenths of a point to 5.8%. This is the highest savings rate since September. It will have to be seen in the next few months if the boost in income due to the payroll tax reduction is largely saved or spent.
As measured by the PCE deflator, prices increased 0.3% over the month, primarily due to energy products. From a year prior, the PCE deflator was 1.2% higher. The core PCE deflator, which excludes energy and food prices, rose by a lesser 0.1% over the month and was 0.8% higher than a year prior.
|m/m % change||Jan||Dec||Nov||Oct||Sep||Aug|
|Core PCE Deflator||0.1||0.0||0.1||0.1||0.0||0.0|
|Savings Rate (level)||5.8||5.4||5.4||5.5||5.8||6.1|