The U.S. Commerce Department said today tha U.S. personal income fell 2.3% after an unrevised 3.7% rise in December — a record gain fueled by Microsoft Corp.’s US$3-a-share dividend. Stripping out the Microsoft factor, income increased 0.5% in January and 0.6% in December.

Meanwhile, a second Commerce report showed that sales of new single-family homes dropped 9.2% to a seasonally adjusted annual rate of 1.106 million in January after an upwardly revised 5.2% gain in December. The weakness was broad-based, with three of four regions posting declines; only the Western U.S., where sales picked up 5.6%, saw improvement.

The Commerce Department reported earlier this month that housing starts rose 4.7% in January.

Personal spending was unchanged in January after rising an unrevised 0.8% in December, thanks largely to a 4.3% drop in durable-goods spending amid a large slump in auto sales.

Other categories posted modest gains: spending on non-durable goods rose 0.8% after remaining flat in December, while spending on services gained 0.4% in January after a 0.5% increase. After taking account of inflation, consumer spending fell by 0.2% in January.

Disposable income, or income after taxes, tumbled 2.6% following a revised 4.1% advance. Growth in wages and salaries, the mainstay of personal incomes, slowed but remained relatively strong, increasing US$22.3 billion after a US$28.4 billion gain in December. As the Microsoft-related surge in December unraveled, dividend income fell US$295.8 billion after increasing US$301.7 billion.

The drop in disposable incomes pushed the savings rate down to 1% in January. Savings had jumped to 3.6% of disposable income in December, bolstered by Microsoft, after having been steady at 0.5% for prior three months.

Inflation measures in the report ticked up slightly. A price index for personal consumption expenditures excluding food and energy rose 0.3% during January compared to the prior month. The rate was flat in December. Year over year, personal consumption expenditures minus food and energy rose 1.6% after rising 1.5% in December.

Average and median home prices were mixed. The average price was US$281,900 in January, compared with a revised US$281,800 in December.