US personal income increased 0.8% MoM, and personal spending increased 0.4% MoM in February, the second straight month of income growth outpacing spending growth.

• US personal income increased 0.8% MoM, above 0.4% MoM expected and the largest monthly increase since January 2024. Disposable income growth was 0.9% MoM, also the largest since January 2024.

• The large increase in personal income was partly caused by a strong 2.2% MoM increase in personal current transfer receipts which could be a result of an increase in unemployment insurance payouts from DOGE layoffs or government buyouts of federal employees.
• At 4.6%, the personal savings rate was the highest since June 2024.
• Personal consumption expenditure was up 0.4% MoM, falling short of expectations of an 0.5% MoM increase but the largest of 2025 so far. Real personal spending growth was just 0.1% MoM.
• Goods spending was up 0.9% MoM in February after a -1.7% MoM drop in January, likely driven by stronger auto sales.

• Services spending was up just 0.2% MoM, the lowest monthly increase since August 2023.

The PCE price index was up 0.3% MoM and 2.5% YoY in February, in line with expectations and unchanged from January.

• The core PCE price index was up 0.4% MoM and 2.8% YoY in February, slightly above expectations of 0.3% MoM and 2.7% YoY. The annual rate was a tick higher than the January rate of 2.7% YoY.
• The food component was flat on a monthly basis, and energy was up 0.1% MoM.
• The PCE goods index was up 0.2% MoM and 0.4% YoY (prev 0.6% YoY), and the PCE services index was up 0.4% MoM and 3.5% YoY (prev 3.4% YoY).