Income, Spending, and Inflation

The Bureau of Economic Analysis reported this morning that Personal Income rose a relief-fueled 21.1% in March and that beat the estimates calling for 20.3%. February’s plunge of 7.1% was revised to a plunge of just 7%. Personal Spending rose 4.2% and that was pretty much in line with the 4.1% expectation. Also from the BEA, the Personal Consumption Expenditures Index rose by the anticipated 0.5% in March with the year-over-year pace of 2.3% matching forecasts. February’s year-over-year rate was 1.5%. Without food and energy, core PCE rose 0.4% for the month with the year-over-year pace rising to the expected 1.8% from 1.4%. The Bureau of Labor Statistics reported that its Employment Cost Index rose by a slightly-greater-than-expected 0.9% in Q1. Adjusted for inflation, Real Personal Spending rose 3.6% in March in a reversal of February’s 1.2% slide. Later today we’ll hear from the University of Michigan when it reports on Consumer Sentiment and also from Market News International with its Chicago PMI.

Meanwhile, Treasury prices are off just a touch with the Long Bond’s yield at 2.30% and the Ten-Year bringing 1.64%. The Two-Year is yielding around 16 basis points. Crude oil is off a dollar-and-a-half to $63.40 with gold slipping about $5 to $1,767. Equities might be taking a breather today.