WASHINGTON — U.S. January personal income increased 0.3% as personal consumption expenditures rose 0.4% and core PCE prices grew 0.3% for a 2.2% gain over the year, headlines t hat were slightly better than expected on a multitude of special factors and masked underlying weakness.

January real PCE was flat, indicating that growth is very slow. January real PCE stands merely up 0.5% above the fourth quarter average, confirming the slowing consumer sector.

Both real durables and nondurables spending slipped in January but services spending was up 0.4%.

January’s special factors affecting income included bonuses/stock options, federal pay hikes, and cost of living adjustments in transfer payments. Excluding these personal income was a much more modest 0.2% rise, the Commerce Department said.

— Market News International

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