Personal income slumped 3.6% last month (+2.2% y/y) after an unrevised 2.6% December jump. A 2.1% decline was the consensus expectation. Last month's fall was due to a one-third drop (-3.3% y/y) in dividend earnings. Income, other than from dividends, also was down by 1.1% (+2.5% y/y). That decline reflected a 0.6% drop (+2.9% y/y) in wage & salaries following a 0.7% December rise. Adding to last month's decline was a 0.3% fall (+1.6% y/y) in interest income. Offsetting these declines was rental income which jumped 2.3% (13.0% y/y) while transfer receipts rose 0.3% (3.5% y/y). 

Despite the drop in income, consumers raised spending by an expected 0.2% (3.2% y/y). That followed a 0.1% December uptick. Leading last month's spending was a 0.4% rise in services outlays. Offsetting the gain was a 0.8% decline (+5.4% y/y) in spending on durable goods and no change (+2.1% y/y) in nondurables purchases.

With the slump in income and the modest gain in spending, the personal savings rate fell to 2.4% and retraced its earlier rise.

The PCE chain price index was unchanged (+1.2% y/y) for the second consecutive month. Nondurables prices fell 0.3% (+1.0% y/y). Durable goods prices were unchanged (-1.6% y/y) and services prices ticked up 0.1% (1.8% y/y). Excluding food & energy, the price index gained 0.1% (1.3% y/y).  

Adjusted for price changes, disposable income slumped 4.0% (+0.6% y/y) and real spending inched up 0.1% (2.0% y/y) during January.

The personal income & consumption figures are available in Haver's USECON and USNA databases. The consensus expectation figure is in the AS1REPNA database.