US: Personal income in January largely reflecting the stimulus checks – Wells Fargo


During January, personal income jumped 10%. Analysts at Wells Fargo explain the number reflects stimulus checks that also boosted spending. Despite the 2.4% jump in January personal spending, they point out the faster gain in income pushed the personal saving rate higher to 20.5% in January.

Key Quotes: 

“Personal income shot up 10% in January, largely reflecting the stimulus checks that went out as part of the December relief bill. While transfer payments from the government was the largest driver of income growth, it was not the only boost.”

“In the absence of the stimulus checks, personal income would have been flat in January; personal income excluding government transfers declined 0.1% for the month.”

“Last week's January retail sales report came in way above consensus expectations, and most forecasters were not going to be caught off-guard again this week. The consensus expectation of a 2.5% month-over-month increase in personal spending would have been a full percentage point larger than any monthly gain since the re-opening after the shutdowns lifted spending figures in May & June. The actual figure was just one notch short of that sky-high expectations as spending increased 2.4%.”

“We cannot imagine a more telling indication of the pent-up demand for services than the fact that people are willing to brave the cold or take their dinner home in a paper bag.”

“Despite the 2.4% jump in January personal spending, the faster gain in income pushed the personal saving rate higher to 20.5% in January. We estimate “excess” savings, or the recent elevated levels of saving compared to personal saving rates pre-virus, currently stands at $1.7 trillion.”
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD stabilizes after US retail sales smash estimates

EUR/USD has bounced off its lows but remains below 1.20 after US retail sales smashed estimates with a 9.8% leap. Moreover, jobless claims tumbled to 576,000. Markets are digesting the big bulk of data.

EUR/USD News

GBP/USD rises toward 1.38 ahead of Brexit meeting

GBP/USD maintains a cautious approach below 1.3800, accumulating minor losses. Global risk uncertainties weigh on the pair. Investors await the Brexit meeting on the NI issue.

GBP/USD News

ETH seizes the spotlight as BTC and XRP contemplate retracement

Bitcoin price shows a correction in play after the MRI flashed a red ‘one’ cycle top signal. Ethereum shows a strong trend continuation while the rest of the market experiences a minor pullback. 

Read more

XAU/USD jumps above $1,760 amid slumping US T-bond yields

Gold extended its daily rally beyond $1,760 on Thursday. 10-year US Treasury bond yield is down more than 4% on the day. US Dollar Index falls into the negative territory below 91.60.

Gold News

Citi (C) beats on EPS and revenue, investment banking booms!

Citigroup (NYSE:C) reports Q1 2021 earnings showing strong growth in investment banking following on from Goldman smashing it on Wednesday. Citi shares are trading $74.20 in pre-market up nearly 2%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures