The Commerce Department announced on Friday that consumer spending in the U.S. edged up 0.1 percent m-o-m in January 2019, following a revised 0.6 percent m-o-m drop in December 2018 (originally a 0.5 percent m-o-m decrease). Economists had forecast the reading to show a 0.3 percent m-o-m growth. 

Meanwhile, consumer income fell 0.1 percent m-o-m in January after an unrevised 1.0 percent m-o-m increase in the previous month. 

The January decrease in personal income primarily reflected declines in personal dividend income, farm proprietors’ income, and personal interest income that were partially offset by increases in social security benefit payments (related to cost of living adjustments) and other government social benefits to persons, which includes the Child Tax Credit and the Affordable Care Act refundable tax credit.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, edged up 0.1 percent m-o-m in January, following a 0.2 percent m-o-m advance in the prior month. Economists had projected the index would increase 0.2 percent m-o-m.

In the 12 months through January, the core PCE increased 1.8 percent, decelerating from a revised 2.0 percent gain in the 12 months through December (originally a 1.9 percent advance). Economists had forecast a gain of 1.9 percent y-o-y.

In February, consumer income rose 0.2 percent m-o-m, due primarily to increases in wages and salaries, government social benefits to persons, and proprietors’ income, which were partially offset by a decrease in personal interest income. Economists had expected the personal income to increase by 0.3 percent m-o-m in February.