**MNI: 5 Things We Learned From December Personal Income Data>

By Kevin Kastner, Holly Stokes, and Sara Haire

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

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

the Bureau of Economic Analysis: 

     - The personal income and spending data suggest core inflation 

remains contained, with little changes in the year/year rate as we 

approach Wednesday's FOMC meeting. However, the continued drops in the 

saving rate, now at a 12-year low, are somewhat alarming.  

     - The core PCE price index rose 0.2% (+0.177% unrounded), as 

expected, after a 0.1% gain in November. The y/y rate held steady at 

1.5%, significantly below the 1.9% y/y rate in December 2016. 

     - Overall PCE price index rose only 0.1% as energy fell 1.2%, 

pulling the y/y rate down to +1.7% from +1.8% in November. 

     - The savings rate fell to 2.4% from 2.5% in November, hitting its 

lowest point since December 2005. Some analysts note that the declines 

in the savings rate over the last year have been a key support for 

consumption, as consumers are confident enough about the economy, and 

the job market to shift from saving to spending. 

     - Personal income rose 0.4% vs the 0.3% gain expected, led by solid 

gains in wages and salaries and interest income. Current dollar PCE was 

up 0.4%, as expected. Real PCE was up 0.3% after a 0.5% gain in 

November. 

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

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