Analysts from Wells Fargo explain that although personal income and spending data beat expectations for February, revisions to January’s data were decisively negative and noted that a higher savings rate and solid fundamentals are encouraging. Key Quotes: “First looking at personal income, February’s gain followed a string of solid monthly gains, an encouraging sign.” “We expect the decline in income will prove transitory as solid job creation and a tightening labor market are supportive of further gains in income. We forecast nominal personal income will rise 4.5 percent, on a year-over-year basis in Q1.” “The more surprising portion of this release was the modest gain in personal spending and large downward revisions to spending in January. January spending was initially reported as a solid gain of 0.5 percent, which was mostly revised away to show a scant 0.1 percent increase”. “While the downward revisions to previous months introduces some downside risk to personal consumption in the first quarter, upward revisions to personal consumption in the Q4 GDP report should allay some fears. In addition, the savings rate increased to 5.4 percent, matching the highest level since the start of 2013.” “Finally, the core PCE deflator held steady at 1.7 percent year over year, suggesting the uptick in January is likely to be sustained, which supports our outlook for two Fed rate hikes this year.” For more information, read our latest forex news.