March 29, 2010
U.S. consumers in February spent as expected even though their incomes didn't budge amid high joblessness, while inflation stayed benign.
Personal income was flat compared to the prior month, the Commerce Department said Monday. Private wages and salaries posted a small increase of $2 billion, but proprietors' income fell.
Personal spending increased by 0.3%. Consumer spending makes up 70% of demand in the U.S. economy.
Economists surveyed by Dow Jones Newswires forecast a 0.1% increase in income and a 0.3% increase in spending for February.
The saving rate slowed, as did a key gauge of inflation. The core price index for personal consumption expenditures, which excludes volatile food and energy, rose 1.3% compared to February 2009. It was 1.5%, year over year, in January 2010. The Fed checks the index for signs of inflationary pressure within the economy.
Monthly, the core index was flat in February compared to the prior month.
The PCE price index including food and energy prices also was unchanged in February compared to January and climbed 1.8% year over year.
With income flat, the saving rate in February was 3.1%, the smallest since October 2008. The rate was 3.4% in January and 4.0% in December.
Prior month data on income and spending were revised. The Commerce Department said January income rose 0.3%, compared to a previously reported 0.1% gain. It said spending climbed 0.4%, compared to the 0.5% increase that was reported earlier.
U.S. consumers in February spent as expected even though their incomes didn't budge amid high joblessness, while inflation stayed benign.
Personal income was flat compared to the prior month, the Commerce Department said Monday. Private wages and salaries posted a small increase of $2 billion, but proprietors' income fell.
Personal spending increased by 0.3%. Consumer spending makes up 70% of demand in the U.S. economy.
Economists surveyed by Dow Jones Newswires forecast a 0.1% increase in income and a 0.3% increase in spending for February.
The saving rate slowed, as did a key gauge of inflation. The core price index for personal consumption expenditures, which excludes volatile food and energy, rose 1.3% compared to February 2009. It was 1.5%, year over year, in January 2010. The Fed checks the index for signs of inflationary pressure within the economy.
Monthly, the core index was flat in February compared to the prior month.
The PCE price index including food and energy prices also was unchanged in February compared to January and climbed 1.8% year over year.
With income flat, the saving rate in February was 3.1%, the smallest since October 2008. The rate was 3.4% in January and 4.0% in December.
Prior month data on income and spending were revised. The Commerce Department said January income rose 0.3%, compared to a previously reported 0.1% gain. It said spending climbed 0.4%, compared to the 0.5% increase that was reported earlier.
Closed November 2010
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