American consumers lifted spending modestly in February, but will retrench sharply in the months ahead even with direct federal payments to households, Sal Guatieri from BMO Capital Markets reports.
Key quotes
“Personal spending rose an expected 0.2%, and 0.1% in real terms. Services spending rose 0.4% while spending on goods was already in retreat, down 0.3% in the month.”
“Personal income rose a smart 0.6%, holding the yearly rate at 4.0%. The savings rate kicked up to 8.2%, so it was at least at supportive levels prior to the storm.”
“Core PCE prices rose 0.2%, matching an upwardly revised advance the prior month. While this kicked the yearly rate up a notch to 1.8%, core inflation is expected to drift down toward 1%. This could keep the Fed eying near zero rates until 2022.”
Share
