Consumers went on a bit of a spending spree in March according to the BEA’s Personal Income and Outlays Report.
Income
Disposable personal income (DPI), personal income less personal current taxes, increased $104.0 billion (0.5 percent) and personal consumption expenditures (PCE) increased $160.9 billion (0.8 percent).
Real DPI increased 0.2 percent in March and real PCE increased 0.5 percent; goods increased 1.1 percent and services increased 0.2 percent.
Prices
From the preceding month, the PCE price index for March increased 0.3 percent.
Prices for services increased 0.4 percent and prices for goods increased 0.1 percent.
Food prices decreased less than 0.1 percent and energy prices increased 1.2 percent.
Excluding food and energy, the PCE price index increased 0.3 percent.
Real PCE
The 0.5 percent increase in real PCE in March reflected an increase of 1.1 percent in spending on goods and an increase of 0.2 percent in spending on services.
Within goods, the largest contributors to the increase were gasoline and other energy goods (led by motor vehicle fuels, lubricants, and fluids), other nondurable goods (led by recreational items), and food and beverages.
Within services, the largest contributor to the increase was health care (both outpatient and hospital services).
There is nothing about this report that hints toward rate cuts by the Fed.
Year-Over-Year PCE Price InflationYear-over-year PCE price inflation went from 2.5 percent last month to 2.7 percent in March.The Fed will remain on hold.
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