Highlights
Personal income fell a roughly as expected 2.3% in January with the comparison against December, which was up 3.7%, hurt by the big dividend payout from Microsoft.

Excluding Microsoft, the Commerce Department said income rose a solid 0.5% in January vs. a 0.6% gain in December. Growth in wages and salaries rose a solid 0.6% vs. a 0.5% gain in December. The savings rate fell to a soft 1.0% in the month following a Microsoft-inflated gain in December of 3.5%.

Personal spending was unchanged in January. Spending on durables was down 4.3% reflecting weak car and light truck sales in the month. Spending on non-durables was up 0.8% with spending on services up 0.4%.

The chain-weight personal consumption expenditure core price index -- a closely watched reading of inflation at the Federal Reserve -- rose a not-so-moderate 0.3% in the month but is up only 1.6% on the year. The readings are consistent with Alan Greenspan's inflationary assessment earlier this month -- that inflation pressures may be building but are currently well contained. The total chain-weight PCE price index was up a moderate 0.2% with the year-on-year rate at 2.2%.

The financial markets showed no reaction to the report, which confirms the current outlook for moderate gains in consumer income and spending.