While there was no surprise in this morning's release of the PCE data, which came at 0.2%, on top of expectations, and unchanged from January's revised 0.2%, it was the action at the consumer level that was notable, as Spending increased from a revised 0.3% to 0.7%, on expectations of 0.5%, while personal income declined notably from a revised 1.2% to 0.3%, below expectations, as US Consumer had to dip into their savings in the month of February. On the Personal Savings Rate: "Personal saving -- DPI less personal outlays -- was $676.7 billion in February, compared with $710.5 billion in January. Personal saving as a percentage of disposable personal income was 5.8 percent in February, compared with 6.1 percent in January." As the chart shows, personal savings continue to trend in the 5-6% range, indicating that consumers are still uncertain whether to splurge or continue deleveraging.
Focusing on wages, from the report:
Private wage and salary disbursements increased $16.4 billion in February, compared with an increase of $16.7 billion in January. Goods-producing industries' payrolls decreased $1.0 billion, in contrast to an increase of $12.0 billion; manufacturing payrolls decreased $1.6 billion, in contrast to an increase of $8.3 billion. Services-producing industries' payrolls increased $17.4 billion, ompared with an increase of $4.7 billion. Government wage and salary disbursements increased $0.3 billion, compared with an increase of $2.5 billion.
On the tax witholding surge in January and why that is no longer the case in February, courtesy of the expiration of FICA benefits:
Personal current taxes increased $2.2 billion in February, compared with an increase of $55.4 billion in January. The January change reflected the expiration of the Making Work Pay Credit provision of the American Recovery and Reinvestment Act of 2009, which had boosted federal withheld income taxes by $38.6 billion in January. The January change also reflected increased federal net nonwitheld income taxes (payments of estimated taxes plus final settlements less refunds), which had boosted January net withheld taxes by $11.3 billion. Disposable personal income (DPI) -- personal income less personal current taxes -- increased $36.0 billion, or 0.3 percent, in February, compared with an increase of $92.0 billion, or 0.8 percent in January.
And some highlights from other personal income:
Contributions for government social insurance -- a subtraction in calculating personal income -- increased $2.2 billion in February, in contrast to a decrease of $94.6 billion in January. The January change reflected decreases in personal contributions for government social insurance and increases in employer contributions. The January change in personal contributions for government social insurance reflected the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which temporarily decreased the social security contribution rate for employees and self-employed workers by 2.0 percentage points for 2011, or $105.4 billion in January. As noted above, employer contributions were boosted $7.5 billion in January by increases in the unemployment insurance rate.
Well the "fiscal" boost has now been completely digested. From here on out all stimulus is in Bernanke's hands.