The Commerce Department reported on Friday that consumer spending in the
U.S. climbed 1.8 percent m-o-m in January 2023 after an upwardly revised 0.1 percent
m-o-m drop (from -0.2 percent m-o-m) in December 2022. That represented the
biggest monthly increase in consumer spending since March 2021 (+5.2 percent
m-o-m). Economists had
expected a jump of 1.3 percent m-o-m for January.
Meanwhile, consumer income advanced 0.6 percent m-o-m in January,
following an upwardly revised 0.3 percent m-o-m gain (from +0.2 percent m-o-m)
in the previous month. That marked the sharpest monthly increase in consumer
income in three months. Economists had predicted a 1.0 percent m-o-m surge.
The January rise in personal income was driven by an advance in
compensation, reflecting private wages and salaries in both services-producing
industries and goods-producing industries.
Elsewhere, the personal consumption expenditures (PCE) price index,
excluding the volatile categories of food and energy, which is the Federal Reserve's
preferred inflation gauge, increased 0.6 percent m-o-m in January, following a downwardly
revised 0.3 percent m-o-m gain (from +0.4 percent m-o-m) in December. That was
the sharpest monthly advance in the core PCE price index since August 2022 (+0.6
percent m-o-m). Economists had forecast the indicator would rise 0.4 percent
m-o-m.
In the 12 months through January, the core PCE price index soared 4.7
percent, quickening from an unrevised 4.4 percent in the 12 months through December. Economists had foreseen
an increase of 4.3 percent y-o-y.