Personal income increased $108.1 billion, or 1.0 percent, and disposable personal income (DPI)increased $73.0 billion, or 0.8 percent, in January, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $51.9 billion, or 0.5 percent. In December,personal income increased $55.7 billion, or 0.5 percent, DPI increased $46.0 billion, or 0.5 percent, and PCE increased $69.4 billion, or 0.7 percent, based on revised estimates.
These are good numbers and probably partially explain the increase in spending we are seeing.
However, core PCE -- a measure of inflation -- increased .3% and core PCE incresed 2.3% year-over-year. These numbers add further fuel to the argument the Fed won't be lowering rates anytime soon.
1 comment:
Those numbers are fine but they're only fine for the Median Man. In the bottom tiers of income, there was zero going on, and that's the rub. Mortgages held by the bottom 60% or so of people are in trouble, and their consumption isn't based on increasing income.
Food's rising because of push into ethanol using food corn as raw material - oh brilliant! Let's exclude food prices, and oil prices from our daily inflationary lives. That just doesn't work for many people. The Median Man picture is not describing what's happening at the margins, which is where markets are always made.
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