US: Soft spending, inflation well below target – Wells Fargo

Data released on Friday, showed consumer spending rose 0.2% in January and income 0.6%. Analyst at Wells Fargo highlight the core PCE deflator came in at 1.6%, which is below the Federal Reserve’s target

Key Quotes: 

“Amid pandemic fears gripping financial markets this week, a run of solid economic news continued this morning with a report that personal income rose a solid 0.6% in January.”

“Personal spending was a little softer than expected in January, rising 0.2% compared to the 0.3% consensus expectation. After adjusting for price, real consumption rose a scant 0.1% in January, suggesting a slowing trend going into the first quarter.”

“The core PCE deflator came in at 1.6%, which remains comfortably below the Fed’s target. Inflation would not be an impediment to any potential Fed response to the current crisis.”