February’s increase in personal income was only slightly below the revised 0.4% gain seen in January. After-tax incomes rose 0.2% in February, according to the Bureau of Economic Analysis (BEA).
Increased income, coupled with a completely dormant spending rate, contributed to personal savings increasing to $317.5 billion, compared with $301.0 billion in January. Personal savings as a percentage of disposable personal income was 4.0% in February, compared with 3.8% in January.
However, future spending may be poised to experience growth as February’s personal income continued an upward trek and consumer spending remained flat for the second month in a row.
Wall Street economists polled by Reuters missed the mark, projecting spending to fall 0.1% in February as severe winter weather kept shoppers at home. Additionally, the economists missed income’s figures, having forecast a milder 0.2% rise.
Private wage and salary disbursements increased $8.4 billion in February, compared with an increase of $10.1 billion in January. By industry:
- Goods-producing industries’ payrolls decreased $2.1 billion
- Manufacturing payrolls increased $0.1 billion
- Distributive industries’ payrolls decreased $0.2 billion
- Service industries’ payrolls increased $10.9 billion
Government wage and salary disbursements were also up in February, recording an increase of $6.5 billion, compared with an increase of $8.3 billion in January. Adding $1.3 billion to the month’s figures was a pay raise for federal civilian personnel. January’s figures were similarly affected by pay raises for federal and military personnel, which added $5.4 billion to government payrolls last month.
The BEA says March’s figures will be released on April 28, 2003. A full release of February data can be found at http://www.bea.gov/bea/newsrel/pi0203.htm .