**MNI 5 Things: US Core PCE Prices +0.2%; Y/Y Up To +1.9%>

--5 Things We Learned From March Personal Income Data

By Kevin Kastner and Sara Haire

     WASHINGTON (MNI) - The following are the key points from the 

March personal income, spending, and price data released Monday by 

the Bureau of Economic Analysis: 

     - The data suggest inflation is ticking up, with a jump in the 

year/year rates due to base effects from a decline in March 2017. 

However, core inflation, income, and PCE were generally as expected and 

foreshadowed by Friday's 1Q GDP report, so the market reaction is likely 

to be minimal. 

     - The core PCE price index rose 0.2% (+0.153% unrounded), as 

expected, after a 0.2% gain (+0.202%) in February. The y/y rate jumped 

to 1.9% (+1.882%) from 1.6% in February, returning the year/year rate to 

the levels seen prior to the month/month dip in March 2017. The overall 

PCE price index was flat after a 0.2% February gain, as energy prices 

fell by 2.8% in the current month to offset gains in food and the core. 

The PCE price index y/y rate rose to 2.0% from 1.7% in the previous 

month, also the highest since February 2017. 

     - The savings rate slipped to 3.1% from 3.3% in February. It 

remains well below the 3.9% rate a year ago. While consumers have turned 

to credit cards to support spending, the low savings rate suggest some 

consumers continue to prioritize spending over savings. 

     - Personal income rose 0.3%, below expected, led by a modest gain 

in wages and salaries, as well as gains in the other income categories. 

Personal taxes rose 0.4% after a 0.7% gain in February, so disposable 

personal income posted a 0.3% increase for the second month in a row. 

     - Current dollar PCE was up 0.4%, as expected. Real PCE was also up 

0.4% following a 0.2% decline in February. This is already incorporated 

into the more modest 1.1% rise in 1Q PCE reported on Friday. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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