US personal income and spending ticked higher in February, but the year-over-year growth trend slowed on both counts, the Bureau of Economic Analysis reports. There’s still a positive trend in the numbers—enough to keep the economy expanding for the near-term future, but today’s numbers leave little room for arguing that growth is set to accelerate after what’s shaping up as a sluggish first quarter.
Personal consumption expenditures (PCE) increased 0.1% last month vs. January. That’s the third straight monthly advance at the 0.1% mark, the weakest run of growth in a year. Meanwhile, disposable personal income (DPI) grew at a bit faster—0.2%–in February, although this was half the pace in the previous month and the slowest gain since last November.
Turning to the year-over-year trend offers a bit more encouragement. In particular, private-sector wage growth is still rising at a solid 4.6% rate. But note that the latest gain eased closer to the low end of annual increases over the past year.
The broad trend for income and spending continues to provide support for anticipating that the consumer sector will remain a positive factor for the US economy in the immediate future. As noted last week, the numbers for the macro profile published to date point to low recession risk for the US through February. Today’s release doesn’t conflict with that analysis. At the same time, the data du jour imply that the trend will remain sluggish.
“There’s still this sense of more of the same right now — the consumer is still chugging along, not really strong but not terribly weak, either,” Scott Brown, chief economist at Raymond James Financial, tells Bloomberg. “Things are a little bit softer than we’d hope to be, but still consistent with the economy growing.”