Inflation eats up most Jan income gains
(MarketWatch) -U.S. personal incomes rose 0.7% in January, but higher inflation eroded most of the gains, the Commerce Department reported Wednesday. Consumer inflation increased 0.5% in January on higher energy costs. Core inflation, which strips out food and energy costs to give a better view of underlying inflation pressures, increased 0.2%. Core inflation has risen 1.8% in the past 12 months, down from 1.9% in December and just below the 2% lid the Federal Reserve would like to keep on inflation. It's the lowest year-over-year core inflation since March 2004. Real disposable incomes - after inflation and after taxes - increased 0.1% in January, the weakest gain since August. Real disposable incomes are up 2.2% in the past 12 months. Real consumer spending - adjusted for inflation - increased 0.4% in January, the weakest since October