US personal income and spending seen rising (MarketWatch) (28-02-2011)

WASHINGTON (MarketWatch) – According to the data released today by the Commerce Department, personal income of American workers rose sharply by a seasonally adjusted 1.0% in the first month of 2011, marking the biggest increase in a year and a half, while consumer spending rose a smaller 0.2.

 The increase in income is the result of a one-year reduction in worker contributions to Social Security that took effect in January.

A key inflation indicator, the personal consumption expenditure price index, rose 0.3% in January. The core PCE, which excludes volatile food and energy costs, rose 0.1%. Over the past year, core inflation has risen 0.8%.

Economists surveyed by MarketWatch had forecast a 0.9% gain in personal income and a 0.4% increase in consumer spending. The core PCE index was expected to rise 0.1%. The government also revised consumer spending in December down to 0.5% from 0.7% originally.

Source: MarketWatch