by Calculated Risk on 3/31/2023 08:36:00 AM

The BEA released the Personal Income and Outlays report for February:

Personal income increased $72.9 billion (0.3 percent) in February, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $89.9 billion (0.5 percent) and personal consumption expenditures (PCE) increased $27.9 billion (0.2 percent).

The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index also increased 0.3 percent. Real DPI increased 0.2 percent in February and Real PCE decreased 0.1 percent; goods and services each decreased 0.1 percent.
emphasis added

The February PCE price index increased 5.0 percent year-over-year (YoY), down from 5.3 percent YoY in January, and down from the recent peak of 7.0 percent in June 2022.

The PCE price index, excluding food and energy, increased 4.6 percent YoY, down from 4.7 percent in January, and down from the recent peak of 5.4 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through February 2023 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was at expectations, and the increase in PCE was below expectations.

Inflation was slightly lower than expected.

Using the two-month method to estimate Q1 real PCE growth, real PCE was increasing at a 4.0% annual rate in Q1 2023. (Using the mid-month method, real PCE was increasing at 4.7%)