Personal Income and Spending Ticked Higher in February

Personal income and consumer spending both posted gains in February. Monday’s report from the Bureau of Economic Analysis showed a gain of 0.2% in income and a gain of 0.1% on spending.

Bloomberg’s consensus estimate was 0.1% on both income and on spending.

Where things get more interesting here is on the annual reports. The core personal consumption expenditures (PCE) price index for February of 2016 was up by 1.7% from February of 2015. The headline price index was up 1.0% on the annualized report. As a reminder, the Federal Reserve is hoping for 2.0% to 2.5% inflation.

So, how does this translate into raw dollars?

Personal income’s increase of 0.2% was up $23.7 billion, and the 0.2% disposable personal income translated to a gain of $23.7 billion. The 0.1% gain in PCE translated to a gain of $11.0 billion in February.
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And the breakdown:

• Wages and salaries decreased $9.4 billion in February.
• Private wages and salaries decreased $12.9 billion.
• Government wages and salaries increased $3.5 billion.
• Supplements to wages and salaries increased $2.4 billion in February.
• Proprietors’ income increased $0.6 billion in February.
• Farm proprietors’ income increased $2.1 billion.
• Nonfarm proprietors’ income decreased $1.5 billion in February.
• Rental income of persons increased $6.7 billion in February.
• Personal income receipts on assets (personal interest income plus personal dividend income) increased $7.3 billion.
• Personal current transfer receipts increased $14.1 billion in February.
• Contributions for government social insurance (a subtraction in calculating personal income) fell $2.0 billion in February.