by Calculated Risk on 3/03/2014 08:43:00 AM

The BEA released the Personal Income and Outlays report for January:

Personal income increased $43.9 billion, or 0.3 percent ... in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $48.1 billion, or 0.4 percent.
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The change in the January estimate of personal income was affected by several special factors. Personal income in January was boosted by several provisions of the Affordable Care Act (ACA), which affected government social benefit payments to persons. In addition, personal income was boosted by cost-of-living adjustments to several federal transfer programs and by pay raises for civilian and military personnel. In contrast, the change in personal income in January was reduced by the expiration of Emergency Unemployment Compensation programs and by lump-sum social security benefit payments that had boosted December personal income. In summary, excluding all of these special factors, personal income increased $23.7 billion, or 0.2 percent, in January, in contrast to a decrease of $15.1 billion, or 0.1 percent, in December.
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Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in January, in contrast to a decrease of 0.1 percent in December. ... The price index for PCE increased 0.1 percent in January, compared with an increase of 0.2 percent in December. The PCE price index, excluding food and energy, increased 0.1 percent in January, the same increase as in December.

On inflation, the PCE price index increased at a 1.2% annual rate in January, and core PCE prices increased at a 1.1% annual rate.  This is very low and far below the Fed's 2% target.

The following graph shows real Personal Consumption Expenditures (PCE) through January 2013 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

This is just one month of Q1, but this suggests an increase in the PCE contribution to growth similar to Q4.