Personal income rose in January 2008, but inflation also rose in January 2008, canceling-out the purchasing power of most of the personal income gains.
Nominal consumer spending increased 0.4% in January 2008 as did personal income, the U.S. Commerce Department announced Friday, in a statement. Each was above what economists surveyed by Bloomberg News have estimated -- a 0.2% increase for each.
However, inflation also rose in January 2008, canceling-out the purchasing power of most of the personal income gains.
Meanwhile, the PCE Deflator, which the U.S. Federal Reserve follows closely as a gauge of inflation, increased 0.4%. During the past 12 months, prices have risen 3.7%, roughly twice the pace of the 1.8% 12-month inflation rate as of August 2007.
Core inflation -- which excludes food and energy prices -- increased 0.3% in January 2008 and is running at a 2.2% rate during the past 12 months. That 2.2% rate is above the U.S. Federal Reserve's 1.5-2% target zone for PCE Deflator core inflation, commonly referred to as the Fed's "comfort zone."
Nominal consumer spending increased 0.4% in January 2008 as did personal income, the U.S. Commerce Department announced Friday, in a statement. Each was above what economists surveyed by Bloomberg News have estimated -- a 0.2% increase for each.
However, inflation also rose in January 2008, canceling-out the purchasing power of most of the personal income gains.
Meanwhile, the PCE Deflator, which the U.S. Federal Reserve follows closely as a gauge of inflation, increased 0.4%. During the past 12 months, prices have risen 3.7%, roughly twice the pace of the 1.8% 12-month inflation rate as of August 2007.
Core inflation -- which excludes food and energy prices -- increased 0.3% in January 2008 and is running at a 2.2% rate during the past 12 months. That 2.2% rate is above the U.S. Federal Reserve's 1.5-2% target zone for PCE Deflator core inflation, commonly referred to as the Fed's "comfort zone."
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