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U.S. Personal Income Climbs 0.4% In January, More Than Expected

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While the Commerce Department released a report on Wednesday showing a slightly bigger than expected increase in U.S. personal income in the month of January, the report also showed that personal spending rose by less than expected.

The report said personal income climbed by 0.4 percent in January after rising by 0.3 percent in December. Economists had been expecting another 0.3 percent increase.

Disposable personal income, or personal income less personal current taxes, rose by 0.3 percent for the second straight month.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in January after climbing by 0.5 percent in the previous month. Spending had been expected to rise by 0.3 percent.

Real spending, which is adjusted to remove price changes, actually fell by 0.3 percent in January after rising by 0.3 percent in December.

With income rising faster than spending, personal saving as a percentage of disposable personal income ticked up to 5.5 percent in January from 5.4 percent in December.

A reading on inflation said to be preferred by the Federal Reserve showed that core consumer prices were up 1.7 percent year-over-year in January, unchanged from the previous month.

by RTT Staff Writer

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