**MNI DATA IMPACT:US Jan Core PCE Price Index +0.1%;Y/Y +1.8%>

By Kevin Kastner, Harrison Clarke and Shikha Dave

     WASHINGTON (MNI) - The core PCE price index rose by 0.1% in 

January, above the flat reading expected in a Bloomberg survey, but 

below the 0.2% gain expected by an MNI survey, data released Friday by 

the Commerce Department showed. 

     The core PCE price index was up 1.8% year/year in January, a slower 

pace than the 2.0% year/year gain now reported in December, keeping the 

rate just below the 2% target set by the Federal Reserve. 

     Here are some of the key factors from the data release on Friday: 

     - Personal income was up 0.2% in February, below the 0.3% gain 

expected by both the Bloomberg consensus and the MNI survey. Personal 

income was down 0.1% in January. Wages and salaries were up 0.3% in 

February. There were also income gains for proprietors' income and 

rental income, but another decline for interest income. The growth in 

transfer income slowed considerably.

     - Current dollar PCE was up 0.1% in January, compared with 

expectations for a 0.3% gain by the Bloomberg consensus and the MNI 

survey. The softer-than-expected reading was the result of a 1.2% 

decline in durable goods spending. This was offset by gains in 

nondurable goods and services spending. 

     - Real PCE was up 0.1% in January after a 0.6% decline in December, 

with real durables PCE down 1.6%. The overall increase was driven by a 

0.5% gain in real nondurables PCE, and a 0.2% gain in real services PCE. 

The January level was down 0.6% SAAR from the Q4 average after PCE rose 

2.5% in the Q4 GDP data. 

     - The overall PCE price index was down 0.1% in January after a 0.1% 

increase in December. The year/year rate was up 1.4%, a significant 

slowdown from the 1.8% increase in December and the smallest year/year 

gain since September 2016, when it was 1.3%. 

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

[TOPICS: MAUDS$,M$U$$$,MAUDR$]