Savings Rate Drop To 5.3%, Lowest In 10 Months

Of today's Personal Income and spending numbers, the most relevant one was the savings rate. Income came unchanged at 0.4%, in line with expectations (previous revised to 0.4%), Spending was higher than expected, at 0.7% compared to 0.5% consensus (an increase of 0.3% from the revised 0.3% November point), meaning that the savings rate as a percentage of disposable income was 5.3%: the lowest since March 2010. The saving inflection point appears to have been 6.3% hit in June 2010. Is it all downhill from here?

Last but not least the PCE Core was just below expectations, at 0.0% compared to 0.1%. This was the clammest Year over Year core price gain on record. Once again: deflation is everywhere when one excludes everything.