Personal Income was up by 0.4% in February, a steady growth after a 0.5% increase in January, according to the most recent data release from the Bureau of Economic Analysis. Disposable personal income – income remaining after deducting personal income taxes – rose 0.2% following a 0.1% dip in January.
Personal consumption expenditures edged up by 0.1% month-on-month in February. This was the smallest increase within the past six months. Meanwhile, the savings rate increased to 5.6%, up from 5.4% in January. The savings rate declined through the second half of 2016, but was on an upward trend from the beginning of 2017. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, this process of deleveraging held back GDP growth due to reduced consumption.