Personal Income Jumped 10% in January

Personal income rose 10.0 percent in January and consumer spending rose 2.4 percent, the Department of Commerce said Friday.

Incomw was boosted by the $900 billion coronavirus relief bill passed in December.

The figures beat expectations. Economists had forecast a 9.4 percent rise in income and a 2.2 percent rise in consumption.

The increase in consumption included $277.2 billion in spending for goods and $63.7 billion in spending on services. The rise in spending on goods was widespread across all categories, led by recreational goods and vehicles. Spending was also strong on food and beverages.

Spending at restaurants and hotels was also up sharply.

The personal saving rate jumped to 20.5 percent.

The personal consumption expenditure price index, which the Fed uses to measure inflation, rose 1.5 percnt. Core PCE inflation was also up 1.5 percent. The Fed says it wants to get this figure above two percent so that over time PCE inflation averages two percent.