US personal income rose by USD 86.2B, or 0.3% mom in December, supported mainly by gains in compensation and higher government social benefits. Personal spending increased by USD 91.0B, or 0.4% mom. The rise was driven by a solid rebound in services outlays (+USD 98.5B), which more than offset a decline in goods spending (-USD 7.5B).
Inflation pressures, however, picked up at the margin. PCE price index rose 0.4% mom, with core PCE also up 0.4% mom. On an annual basis, headline PCE accelerated to 2.9% yoy from 2.8%, well above expectations, while core PCE ticked up from 2.8% yoy to 3.0%. Both matched expectations.
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