In this morning’s data, Personal Income decreased -7.1% in February, slightly better than estimates. Personal Spending decreased -1.0% in February, which was more negative than expected. The February PCE core Deflator, a closely watched measure of inflation that excludes food and energy prices, remains low increasing only 1.4% on an annual basis. Overall, a large decrease in personal income and small decrease in spending, driven mostly by the impact a 10% increase in personal income in January, when stimulus checks were received. Meanwhile, inflation data points remain muted. As the difficulties in the labor market continue, it is imperative to focus on vaccinations which should give people confidence to return to pre-pandemic activities as much as possible, allowing jobs to return in the hardest hit sectors. In all, bond yields ticked lower following the release of the income and spending data, and equity futures are mixed as we head into the market open.
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