Income Up, Spending Up, Prices Up, Dollar Recovering

Consumer income and spending rose more than expected for January. The Commerce Department reported personal income was up 1% for the month, while many economists were expecting a rise of a modest .3%. Spending by consumers rose by only .5%, much less than the .7% gain from December. Spending accounts for almost two-thirds of the nation’s economy, so this number is closely-watched. The main part of the release is also called the PCE core deflator, a section of the report which measures the prices paid for consumer goods. Posting a higher increase of 2.3% - compared to 2.2% from December – shows us that inflation might not be as subtle as previous reports have shown. All of this information combined to push the market towards a bullish Dollar. As we head into the evening sessions, the USD rose against the Euro and with a 40-pip gain, while the USD/JYP held at 117.58. David Hilgeman, XPRESSTRADE Analyst