Microsoft Moves the Economic Needle

Personal income figures for January are once again distorted by the firm's special dividend.
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Call it the


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effect -- again.

Personal income in January plunged from December, when the tech giant dished out a $32 billion special dividend to shareholders.

Income fell 2.3%, the most in 11 years, but the decline was less than expected. Economists expected income to fall 2.6%. In December, income increased a record $368.2 billion, or 3.7%, because of the payout.

Excluding the Microsoft dividend and other factors, personal income actually increased$52.3 billion, or 0.5%, in January, after increasing $62.6 billion, or 0.6%, in December.

Cyclical factors were also at work in January. Employer contributions for employee pension and insurance funds increased $7.1 billion inJanuary, compared with an increase of $3.7 billion in December.

Spending was flat vs. expectations for a 0.1% gain. Spending rose 0.8% in December.

Personal saving as a percentage of disposable personal income was1.0% in January.