Personal income and spending increased more than expected in February

personal income and personal spending increase in USA

Personal income and spending rose more than expected in February, according to data released from the Commerce Department.

Both income and spending rose by 0.5% after economists forecasted a 0.1% increase in both.

Economists had forecast that they rose 0.1%. They were revised lower for January, from 0.5% for both to 0.1% and 0% respectively.

The new data also shows an increase in personal consumption expenditures (PCE) of 0.1%. PCE is a gauge of individual spending and Federal Reserve chair Janet Yellen’s preferred method for tracking inflationary numbers.

Core PCE, which excludes volatile food and energy costs, rose 0.1% month-on-month, and 1.7% year-over-year.

Core PCE was expected to rise 0.2% month-on-month, and 1.8% year-over-year.

The Fed looks for a rate of 2% for its inflation target.

The PCE deflator, which measures the average change in prices of all domestically consumed items, shrunk by 0.1% in February.

More data to follow as new data is released from the report.