Personal Income increased 0.3% in January, Spending decreased 0.2%

The BEA released the Personal Income and Outlays report for January:

Personal income increased $50.8 billion, or 0.3 percent ... in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $18.9 billion, or 0.2 percent.
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Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in January, in contrast to a decrease of 0.1 percent in December. ... The price index for PCE decreased 0.5 percent in January, compared with a decrease of 0.2 percent in December. The PCE price index, excluding food and energy, increased 0.1 percent, compared with an increase of less than 0.1 percent.

The following graph shows real Personal Consumption Expenditures (PCE) through January 2015 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was lower than expected,  Also the increase in PCE was below the 0.1% decrease consensus.  The sharp decline in oil and gasoline prices pulled down PCE (and the PCE price index).  Even though PCE decreased, real PCE increased in January (as shown in the graph).

On inflation: The PCE price index increased 0.2 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.3 percent year-over-year in January.