“Oh, Ey!” as the Sopranos cast might put it.

Real personal spending in the US receded sharply last month, led lower by what looked like give-back in durables.

The 0.5% decline counted as the largest month-to-month drop in inflation-adjusted consumer outlays since February of 2021 and the second-largest of the post-pandemic era.

Consensus expected only a marginal decline (-0.1%). Nominal spending likewise fell, notching a 0.2% drop against expectations for a gain of similar magnitude.

A quick glance at the breakdown showed a 1.7% drop in real spending on goods, and a 3.4% decline on the durables line. That followed outsized monthly advances for durables in November and December in what most described as pull-forward — i.e., preemptive buying motivated by concerns that tariffs may push up prices in 2025. Consumer sentiment surveys backed that interpretation.

Real spending on services rose, but just barely. The 0.1% (0.08168% unrounded) advance on that line was the slowest since August of 2023.

There are caveats and excuses beyond those briefly mentioned above, but the readout is just one more piece of evidence to suggest the US economy’s decelerating. Recall that retail sales (and particularly control group sales) were very weak for January, and consumer sentiment and confidence are dour and flagging.

The saving rate, at 4.6%, was the highest since June in Friday’s BEA release, and the month-to-month increase from December, 1.1ppt, was tied for the largest since March of 2021. Personal incomes rose well more than expected.

The “good” news is that inflation on the Fed’s preferred metric rose “just” 0.3% MoM in January. The unrounded print was 0.28472%. Those were in line with expectations.

But as the figure below shows, 0.28472% was the briskest since October, the second-fastest in a year and nowhere near consistent with the post-Lehman, pre-COVID monthly average pace of underlying inflation.

Suffice to say terms like “benign” and “good” remain highly relative at best, and disingenuous at worst. On a YoY basis, core PCE ran 2.6%, in line with estimates.

The headline PCE gauge also posted a 0.3% monthly advance, and rose 2.5% measured against the same month a year ago. The so-called (i.e., made up) “supercore” measure posted a 0.2% MoM gain, far below the eye-watering advance for “supercore” prices as derived from the BLS’s CPI release. The PCE version rose 3.1% YoY.

I don’t know how economists will spin the release, nor how markets will trade it, but from where I’m sitting, the quickest monthly advance for core inflation in months and the second-worst drop for real spending in years seems like a decidedly inauspicious juxtaposition, all excuses aside.

Oh, and America’s merchandise trade gap was $153.3 billion last month. That was way ahead of the $116.6 billion estimate and a new record.