After reporting a substantial increase in U.S. personal income in the previous month, the Commerce Department released a report on Friday showing personal income pulled back sharply in the month of February.
The Commerce Department said personal income plunged by 7.1 percent in February after skyrocketing by an upwardly revised 10.1 percent in January.
Economists had expected personal income to plummet by 7.3 percent compared to the 10.0 percent spike originally reported for the previous month.
Disposable personal income, or personal income less personal current taxes, also tumbled by 8.0 percent in February after surging up by 11.4 percent in January.
The sharp pullback in personal income primarily reflected a decrease in government social benefits following the distribution of $600 stimulus checks in January.
The report also showed personal spending slumped by 1.0 percent in February after soaring by an upwardly revised 3.4 percent in January.
Economists had expected personal spending to decrease by 0.7 percent compared to the 2.4 percent jump originally reported for the previous month.
Excluding price changes, personal spending dove by 1.2 percent in February after shooting up by 3.0 percent in January.
“The 1.2% drop in real consumption in February reflected the reversal of the boost from the $600 stimulus checks and disruption caused by the severe winter weather,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “With weather returning to seasonal norms and the next round of stimulus checks already mostly disbursed, we expect a strong rebound in March, with overall consumption growth of close to 10% annualized in the first quarter.”
With income pulling back by much more than spending, personal saving as a percentage of disposable income tumbled to 13.6 percent in February from 19.8 in January.
Meanwhile, a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth slowed to 1.4 percent in February from 1.5 percent in January.
The material has been provided by InstaForex Company – www.instaforex.com
🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.
As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.