US Personal Spending Rises the Least in 5 Months


Personal consumption expenditures in the US increased 0.2 percent month-over-month in January of 2018, following a 0.4 percent rise in December, matching market expectations. It is the lowest gain in household consumption in five months as spending on durables contracted and consumption of services eased.

Personal consumption expenditures (PCE) increased $31.2 billion or 0.2 percent. Spending on durables went down 1.5 percent, following a 0.5 percent rise in December; spending on services rose 0.3 percent, below a 0.6 percent rise in the previous month; spending on nondurbales jumped 1 percent, recovering from a 0.4 percent drop in December. 

Real PCE decreased $24.6 billion or 0.1 percent, mainly due to a fall of $24.6 billion in spending for goods and a partially offsetting $4.8 billion increase in spending for services. Within goods, new motor vehicle sales was the leading contributor to the decrease. 

Personal income increased $64.7 billion or 0.4 percent, the same as in December and better than expectations of a 0.3 percent rise. It primarily reflected increases in wages and salaries and Social Security benefits that were partially offset by a rise in contributions for government social insurance.

Disposable personal income (DPI) increased $134.8 billion or 0.9 percent.

The personal consumption expenditures (PCE) price index increased 0.4 percent after a 0.1 percent rise in December and the biggest gain since September. Excluding food and energy, PCE prices went up 0.3 percent after rising 0.2 percent in December. It is the highest increase since January of 2017. On the year, the PCE price index went up 1.7 percent and the core one increased 1.5 percent, the same rates as in December. The so-called core PCE price index is the Fed's preferred inflation gauge, targeted at 2 percent.

US Personal Spending Rises the Least in 5 Months


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
3/1/2018 1:58:37 PM