Personal income, spending growth flat; Fed’s preferred inflation gauge slows in February

Consumers’ income growth and spending levels have slowed in the early days of 2023.

Inflation, meanwhile, maintains its downward trajectory.

Personal income rose 0.3 percent in February, down from 0.6 percent in January. This was slightly higher than the market estimate of 0.2 percent.

Personal spending edged up 0.2 percent, down from two percent in January. This was below market expectations of 0.3 percent.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, eased to five percent year-over-year in February, down from 5.3 percent in January.

The core PCE price index dipped to just 4.6 percent, down from 4.7 percent.

This comes after the final fourth-quarter GDP growth rate was 2.6 percent, down from 3.2 percent and below the second BEA estimate of 2.7 percent, caused by a sharp slowdown in consumer spending.