The Commerce Department reported on Friday that consumer spending in the U.S. rose 2.4 percent m-o-m in January 2021 after a revised 0.4 percent m-o-m decline in December 2020 (originally a 0.2 percent m-o-m drop). This marked the biggest monthly rise in consumer spending since June 2020. Economists had forecast the reading to show a 2.5 percent m-o-m increase.

Meanwhile, consumer income jumped 10.0 percent m-o-m in January, following an unrevised 0.6 percent m-o-m gain in the previous month. This was the largest monthly gain in consumer income since April 2020. Economists had forecast a 9.5 percent m-o-m climb.

The January gain in personal income was more than accounted for by an increase in government social benefits to persons as payments were made to individuals from federal COVID-19 pandemic response programs.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, increased 0.3 percent m-o-m in January, the same pace as in the prior month. Economists had projected the index would go up 0.2 percent m-o-m.

In the 12 months through January, the core PCE increased 1.5 percent, accelerating from a revised 1.4 percent in the 12 months through December (originally a 1.5 percent climb). Economists had forecast an advance of 1.4 percent y-o-y.