Personal Income Rises With Inflation

In a report this morning, the Bureau of Economic Analysis announced that Personal Income rose by a higher-than-expected 0.6% last month as November’s 1.1% decline was revised to a 1.3% decline. For December, forecasters were only expecting a boost of 0.1%. The 0.2% fall in Personal Spending was less than the 0.4% decline that was expected. November’s slip of 0.4% was revised to a little bit bigger slip of 0.7%. Also from the BEA, December’s Personal Consumption Expenditures Index rose by 0.4% after being flat the month before. December’s rise was slightly higher than expected. Year-over-year, headline PCE rose to 1.3% from 1.1% versus an expected move to 1.2%. Without food and energy, core PCE rose 0.3% for the month and that was more than the 0.1% move that surveys suggested. Year-over-year, core PCE rose to 1.5% from 1.4% versus an anticipated slip to 1.3%. Adjusted for inflation, Real Personal Spending fell 0.6% last month. Later this morning, Pending Home Sales for December will be announced along with the University of Michigan’s Index of Consumer Sentiment.

In the meantime, everybody’s getting nicked-up a little bit as the day begins with sell-offs in both bonds and equities. The yield on the Ten-Year is back up to 1.10% with the Long Bond’s yield rising to 1.87%. Dow futures are flashing triple-digit red as recent equity-market hi-jinx create a little disquiet. Crude oil has managed a slight rise to $52.67 with gold managing a $24 early morning rally to $1,867.