Consumer Spending, Personal Income Decline In February As Social Benefits Drop

Consumer spending and personal income both reported drops in February as financial relief declined sharply during the month, the Commerce Department reported.

• Personal income fell $1,516.6 billion or 7.1%; disposable personal income (DPI) dropped $1,532.3 or 8.0%. Real DPI decreased 8.2%. 
• Meanwhile, personal consumption expenditures (PCE) declined $149.0 billion or 1.0%, and Real PCE fell 1.2%. Goods decreased 3.3% and services dropped 0.1%.
• The Bureau of Economic Analysis said the estimate for February personal income and outlays was impacted by the government fiscal relief which declined sharply in the month. Unemployment benefits also continued but at a lower level, while restrictions and closures remained in place in some states.
• Decreases were widespread across most categories, led by pharmaceutical products and recreational items. This was partly offset by an increase in gasoline and other energy goods. The increase in services reflected higher housing and utilities and in health care, that were partly offset by a decline in spending for food services.
• The PCE price index gained 0.2%. Excluding food and energy, the PCE price index increased 0.1%.