US personal income growth likely slowed in February

Personal income growth in the US is expected to have slowed to 0.1% in February as compared with growth of 0.5% in January. The decline is likely due to weak growth in salary and private wage disbursements. Consumer spending is also expected to slow down.

The headline figure is suppressed likely due to weak expenditure on retail control items and motor vehicle. Meanwhile, the headline figure was helped by a recovery in the services, leading to a slight net rise in nominal personal consumption expenditures of 0.1%.

“The PCE chain-price index is expected to tick down, pushing real PCE to 0.1%. If our forecast is accurate, quarter-to-date real PCE would track at 2.7% annualized above the October-December average, setting a pretty low bar for March in order to achieve our published 2.7 Q1 growth target”, says Societe Geneale.

The producer price index is expected to have lifted the core PCE deflator by 0.2% in February. Financial services gauge mainly led to the slowdown. Airfares PPI is also likely to be a hindrance.

“A reading in line with our forecast would leave the year-over-year at 1.7%”, says Societe Generale.