US Personal Income and Spending: More evidence of a soft patch - Wells Fargo

Data released today showed lower than expected numbers in the personal income and spending report. According to analysts at Wells Fargo, we are still in the shadow of the shutdown in terms of data and shows the consumer is losing momentum. They see that tepid inflation data from the report underpins the decision of the Federal Reserve to pause.

Key Quotes: 

“Personal income fell 0.1% in January but rebounded 0.2% in February—on balance a soft start to 2019 on the income side. December was a curiously bad month for the consumer. In this report and in the retail sales figures for that month we saw the biggest monthly drops in about a decade. Frankly we still have some doubts about that weakness and expected a bounce in January, but personal spending added just 0.1% in the month.

“The PCE deflator was down 0.1% in January, and even the core measure grew a less-than-expected 0.1%. Both measures indicate sub-2% annual inflation and give the Fed more reason to pause.”