Americans Started Saving Aggressively As COVID-19 Concerns Picked Up In February

Americans’ incomes grew at 0.6% MoM in February (following a 0.6% MoM jump in January and better than the expected 0.4% rise) as their spending slowed to just a 0.2% MoM growth (also for the second month in a row).

Source: Bloomberg

On a year over year basis, income growth slowed modestly as spending accelerated.

However, private worker wage growth slowed notably, rising only 3.2% Y/Y, down from 3.7% in Jan and the lowest since Nov 2016, but government wages rose to 3.9%Y/Y in February, the highest since Jan 2019

But, the savings rate jumped again to 8.2%, up from 7.9% and the highest since March 2019…

Finally, The Fed’s favorite inflation indicator – Core PCE Deflator – accelerated to +1.8% YoY, the highest sicne Dec 2018…

 

Source: Bloomberg

As a reminder, all of this was broadly-speaking before stocks started to tank and the virus lockdowns went into place.