2023.01.2713:17:00UTC+00U.S. Personal Income Inches Up 0.2% In December, In Line With Estimates

Personal income in the U.S. increased in line with economist estimates in the month of December, according to a report released by the Commerce Department on Friday.

The report said personal income inched up by 0.2 percent in December after rising by a downwardly revised 0.3 percent in November.

Economists had expected personal spending to edge up by 0.2 percent compared to the 0.4 percent growth originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, rose by 0.3 percent in December, matching the increase seen in November.

Meanwhile, the Commerce Department said personal spending dipped by 0.2 percent in December after slipping by 0.1 percent in November. The modest decrease matched economist estimates.

Real personal spending, which excludes price changes, fell by 0.3 percent in December after edging down by 0.2 percent in November.

With income rising and spending falling, personal saving as a percentage of disposable personal income jumped to 3.4 percent in December from 2.9 percent in November.

The report also said core consumer prices, which exclude food and energy prices, rose by 0.3 percent in December after inching up by 0.2 percent in November.

The inflation reading, which is said to be preferred by the Federal Reserve, was expected to show another 0.2 percent uptick.

The Commerce Department said the annual rate of growth in core consumer prices slowed to 4.4 percent in December from 4.7 percent in November.

"With higher interest rates evidently weighing heavily on demand now, we expect core inflation to continue moderating this year, which will eventually persuade the Fed to begin cutting interest rates late this year," said Paul Ashworth, Chief North America Economist at Capital Economics.