WASHINGTON – U.S. incomes rose much more sharply than expected in January, while spending and core consumer price growth also outpaced forecasts, a government report showed on Thursday.
Incomes rose 1.0 percent in January, marking their biggest gain in a year and doubling an unrevised 0.5 percent gain for December, while January consumer spending rose 0.5 percent after a 0.7 percent increase in December, the Commerce Department reported.
Analysts polled by Reuters had expected personal income to rise just 0.3 percent, and personal consumption expenditures to rise 0.4 percent.
Core consumer prices, which exclude volatile energy and food costs, rose 0.3 percent, outpacing forecasts for a 0.2 percent rise after an unrevised 0.1 percent gain in December.
The core prices were up 2.3 percent compared with a year earlier after an unrevised 2.2 percent 12-month gain in December. Officials at the Federal Reserve have said they prefer the 12-month rise in core prices to remain between 1 percent and 2 percent.
The January saving rate improved slightly to a negative 1.2 percent of disposable personal income after a negative 1.4 percent rate in December. The saving rate has been negative since April 2005.