WASHINGTON - Personal income was flat, while personal spending increased 0.3% in February, in line with economists’ estimates and the smallest increase in five months, the Commerce Department reported today.
Core PCE, which excludes food and energy costs, rose 1.3% for the year ending in February, the smallest year-over-year increase since September. February’s core PCE was unchanged from January.
Personal income grew by less than 0.1% in February following a 0.3% increase in January. Incomes in January were boosted by the Making Work Pay tax credit provided by the federal stimulus law. The provision provides a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers.
Economists polled by Thomson Reuters expected consumption to increase 0.3% and for incomes to increase 0.1%, according to the median estimate.
Consumption grew 0.4% in January, revised lower from 0.5% initially reported.
The personal savings level, the difference between disposable personal incomes and spending, shrank to $340.0 billion in February, the lowest level since October 2008. The savings level was $374.9 billion in January.
